jattpunjabi
Member
[
NEW DELHI: It's rainin dollars for Indian entrepreneurs, with a large number of US-based venture capitalists lining up a huge kitty of about 4.4 billion dollars (over Rs 20,000 crore) for investing in the country's startups and early-stage companies.
According to a new study, over 44 US-based VCs have either raised or are in process of raising between 40 and 400 million dollars for early-stage investments in Indian companies over the next 4-5 years.
The latest trend is being seen by the industry experts as a resurgence of VC activities in the country following huge losses incurred by the venture capitalists and private equity investors during the bust that followed the dotcom boom in late 1990s.
The firms have already raised about 1.75 billion dollars and an average of 100 million dollars each would take the total funds to about 4.4 billion dollars. This amount is equivalent to investment worth 22 billion dollars in the US or Europe on purchasing power parity basis, global research and analytics services firm Evalueserve said in a report.
While the renewed interest of VCs in the country could lead to a possible overheating of the market, it should not be taken as a "bubble", Evalueserve Chairman Alok Aggarwal, the author of the report, said from California.
On the back of the resurgence in fund-raising and investment activities, an overheating of the early-stage VC market in India is more like to occur if VCs continue to focus on their traditionally favourite sectors like IT, BPO, telecom and internet, the report said.
"When markets overheat, they usually cause inflation and this may occur in India as well. So, if the VC market for early stage investment overheats then there would be more liquidity in the system and entrepreneurs based in India would have easier access to money and the valuations of their companies will rise," Aggarwal said.
The diversification process has already started with a number of firms branching out into new areas beyond the IT and related sectors, the report says.
NEW DELHI: It's rainin dollars for Indian entrepreneurs, with a large number of US-based venture capitalists lining up a huge kitty of about 4.4 billion dollars (over Rs 20,000 crore) for investing in the country's startups and early-stage companies.
According to a new study, over 44 US-based VCs have either raised or are in process of raising between 40 and 400 million dollars for early-stage investments in Indian companies over the next 4-5 years.
The latest trend is being seen by the industry experts as a resurgence of VC activities in the country following huge losses incurred by the venture capitalists and private equity investors during the bust that followed the dotcom boom in late 1990s.
The firms have already raised about 1.75 billion dollars and an average of 100 million dollars each would take the total funds to about 4.4 billion dollars. This amount is equivalent to investment worth 22 billion dollars in the US or Europe on purchasing power parity basis, global research and analytics services firm Evalueserve said in a report.
While the renewed interest of VCs in the country could lead to a possible overheating of the market, it should not be taken as a "bubble", Evalueserve Chairman Alok Aggarwal, the author of the report, said from California.
On the back of the resurgence in fund-raising and investment activities, an overheating of the early-stage VC market in India is more like to occur if VCs continue to focus on their traditionally favourite sectors like IT, BPO, telecom and internet, the report said.
"When markets overheat, they usually cause inflation and this may occur in India as well. So, if the VC market for early stage investment overheats then there would be more liquidity in the system and entrepreneurs based in India would have easier access to money and the valuations of their companies will rise," Aggarwal said.
The diversification process has already started with a number of firms branching out into new areas beyond the IT and related sectors, the report says.
