California-based venture capital firm Canaan Partners says it will invest $150 million (about Rs600 crore) in India over three years from its eighth fund, sized at $650 million and raised in January this year. The firm has fully committed its previous $450 million fund across 37 deals in India, Israel and the US.
Canaan, an early-stage venture capital firm that manages nearly $2.4 billion and focuses on technology companies, now plans to hasten its investments in India. It focuses on sectors such as consumer Internet and wireless technologies, enterprise and managed services, and expects to announce its latest deal in a month. “We have no plans of investing out of our core sectors in India. We will invest in sectors where we feel we have the expertise, and can be utilized to gain maximum returns,” says the firm’s managing director Alok Mittal.
In the US, Canaan invests nearly one-third of its corpus in health care technology. In India, the firm says it will not invest in the segment in the near future, but may revisit that stance later. “In our next fund, we may have some allocation for health care technology segment in India,” says Canaan’s general partner Deepak Kamra.
Since it began investing here in 2006, Canaan has stakes in four companies. These include Consim Info Pvt. Ltd, which owns matrimonial site Bharatmatrimony.com; jobs referral portal TechTribe Networks Inc.; remote desktop support company iYogi Technical Services Pvt. Ltd and digital media company Cellcast Asia Holdings. The firm has also provided second-round funding to Consim together with Yahoo Inc. and Mayfield Fund. In Israel, the firm has made two investments since 2006. Canaan says it has not yet decided the amount it plans to invest in Israel in the next three years.
In India, the firm expects to strike three-four deals annually, pacing them out evenly. Canaan generally invests in the range $3-5 million focusing on the market viability of a technology and the entrepreneurs involved.
To beef up its India focus, the firm plans to bring in more professionals to tap the potential of new entrepreneurs. The firm currently has one office in Gurgaon, near New Delhi, and plans to open another next year — either in Mumbai or Bangalore, according to Kamra.
Like many of its US-based counterparts, Canaan does not plan to have an India-specific fund. The firm says it will continue to invest from its global fund. Canaan is not an exception in not having a country-specific fund. Other VC firms such as Norwest Venture Partners, which has said it will raise a $1 billion global fund in 2009 for investments in the US, India, Israel and China, too, invest from their global funds.
Canaan says its target nations for investment would continue to be the US, India and Israel. “We invest in countries where we have some connection…like I am from India. We are not looking for investment opportunities in China for the time being,” says Kamra. Canaan expects to see a rise in the number of technology-driven deals this year such as in mobile value-added services in advertisements and commerce.
Source: Livemint