Investments from venture capital (VC) firms have fallen by 72 per cent in the first half of this year compared to the same period last year, a study by Chennai-based Venture Intelligence and Global India Venture Capital Association reveals.
VC firms committed $117 million in 27 deals as compared to $413 million in 67 deals for the first half in 2008.
''The uncertainty in global financial markets over the past six months has affected VC investing in India as well,'' said Global India Venture Capital Association director Sudhir Sethi.
He added that there were signs of recovery in the last few months.
The most attractive area for investment remained online service companies, apart from financial services, healthcare and education.
According to Arun Natarajan, CEO of Venture Intelligence, the drop in investments reflects caution on part of investors and limited partners.
The largest deals reported for this half of the year are the combined investments of $15 million in cellular broadband gateway company Stoke Inc, JAFCO Asia and VenturEast's commitment in si2 Microsystems to the tune of $12 million, and by Intel Capital and Helion Venture Partners which invested $6.5 million in Global Talent Track.
Of its total six deals, Bangalore-based Helion signed four new deals in sectors other than IT.
Deals for newly founded companies less than five years old made up two-thirds of the invested capital.
Source: Domain B