This March I had visited India again on an official tour, and I must say that the country never fails to impress me. Even though the summer seems much hotter and more unforgiving since when I lived there, overall the country is growing at a brilliant pace. I also noticed that barely out of the slowdown, Indian firms are busy positioning and selling their products and services in a more impactful and effective manner.
My visit was also marked with a few meetings with the media community who were eager to know my perspective on the differences I see between the entrepreneurial ecosystem and the VC scenario in the country and back home in the U.S. I guess one of the major differences will be the maturity of the concept itself. Though India has been a breeding ground for enterprises, with entrepreneurs making, selling and trading wares all the way from China to Europe via the “Silk Route” as early as third century AD, adoption of concepts like venture capital are still at a very nascent stage in India and there still exists ambiguity about the nature of various venture capital firms and their investment interests.
Many Indian entrepreneurs are not clear as to what a VC brings to the table. Many still feel that venture capital is only about money. Some view VC’s as a version of banks. They are reluctant to sell even minority equity in their companies. This is in contrast to US entrepreneurs who have had a lot more experience working with VCs and consider them critical contributors to their early growth story and actively engage VCs in operational and strategic thinking.
There are a couple of inherent industry issues that are very different in India compared to US. The idea of working for startups is still not mainstream in India. Startups find it difficult to hire in India while in the US, working for startups is very acceptable and even at a premium. Another significant issue is the low level of Angel or seed capital in India. In the US the amount of Angel investment is almost the same as early stage Venture investment. In India it probably only around 10% of total startup funding. This means that a lot of the early stage startups are generally starved for capital.
Indian entrepreneurs are on the other hand very creative and are able to do a lot more with less money. They are able to operate on very thin budgets and are very resilient. The domestic market is opening up and so startups no longer have to rely on international markets to sell their products and services. I truly believe that India has a huge potential with the kind of talent available in the country. India is witnessing the emergence of a new set of professionals who are extremely innovative, have the passion and willingness to make it big!
Deepak Kamra, General Partner
iYogi, a 24/7, comprehensive, multi-vendor computer support company for consumers and small businesses recently announced an agreement with Infinite to expand its on-demand global tech support with a service delivery centre in Bengaluru. The three-year agreement with Infinite’s Infrastructure Services Group will provide technical support services on iYogi’s unique global delivery platform, iMantra.
Bharat Matrimony, India’s leading matrimony portal launched an online platform that will exclusively cater to the physically challenged. The platform, abilitymatrimony.com, will be available free of cost and aims to change the attitude of the society towards the social rights of differently-abled persons.
OpenSky, a US-based developer of a networking and commerce platform that allows users to connect their audiences to the products they love recently raised $6 million in series B funding. Canaan Partners also participated in the round.
LendingClub, a peer-to-peer lending network raised $24.5 million round of funding which saw participation from existing investors including Canaan Partners.
Gemvara, an online jewelry customization marketplace, recently raised $5.2 million in Series B funding, co-led by returning investors including Canaan Partners.
TweetPhoto, a social platform allowing users to share and interact about photos across devices and social networks, raised $2.6 million in a first round of venture funding, led by Canaan Partners.
3Crowd Technologies, a provider of management tools for Internet based computing services, raised $6.62 million in first round venture capital led by Canaan Partner.
Green Investment Congress India 2010: Harish Gandhi, Executive Director, Canaan Partners, was one of the speakers at VCCircle’s Green Investment Congress, that was held from 20-21, April a t JW Marriott, India. The aims of the conference was to bridge the gap between investors, fund managers, solution providers, project developers and entrepreneurs at a common platform and push the industry forward and generate positive results. The conference provided the delegates an opportunity to learn from and network with the best minds in the Green landscape and use their insight for maximizing their profits and pushing their growth stories forward in the year that is poised to be a benchmark in the global Green story.
Digital Media Conclave 2010: Harish Gandhi, Executive Director, Canaan Partners, has been nominated as one of the speakers at the Digital Media Conclave 2010 scheduled to be held in Delhi on May 21, 2010. The conference aims to provide and interactive and engaging platform to discuss how business are using digital media and social networks like LinkedIn, Facebook or Blogging, Twitter or search functionalities for connecting with their clients, vendors, employees and the world.
Canaan Partners invests in entrepreneurs and works alongside them to turn visionary ideas into valuable companies. Since 1987, the firm has catalyzed the growth of disruptive technology startups and healthcare companies revolutionizing the practice of medicine. With $3.4 billion under management and more than 94 acquisitions and 54 IPOs to date, Canaan has funded companies such as Acme Packet, Associated Content (acquired by Yahoo), CommerceOne, DoubleClick (acquired by Google), ID Analytics (acquired by LifeLock), Match.com (acquired by IAC), SandForce (acquired by LSI), SuccessFactors (acquired by SAP) and Virsto Software (acquired by VMware), as well as notable healthcare companies such as Advanced BioHealing (acquired by Shire), BiPar Sciences (acquired by Sanofi), Chimerix (NASDAQ: CMRX) and Elevation Pharmaceuticals (acquired by Sunovion). Current technology investments include Blurb, Kabam, Lending Club, Performance Marketing Brands, SOASTA, Tremor Video and Zoosk in the U.S.; BharatMatrimony and UnitedLex in India; and PrimeSense and LiveU in Israel. The Canaan healthcare portfolio includes emerging leaders such as Liquidia Technologies, Civitas Therapeutics and DICOM Grid. Canaan maintains a presence in the global innovation hubs of Silicon Valley, New York City, India and Israel. For more information visit www.canaan.com or www.facebook.com/canaanpartners.
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