A venture capital arm of Intel, Intel Capital India (NASDAQ:INTC), announced it would be investing in three Indian companies - July Systems Inc., KLG SystelLtd and Multi Commodity Exchange of India, with an overall investment in the three of $23 million.
Head of Intel Capital Asia Pacific, Sudheer Kuppam, said the investment from Intel Capital India came from its Intel Capital India Technology Fund, which had $250 million at its disposal. Of that, 60 percent of it has already been invested.
Although not exploding in growth, funding via venture capital in India has been increasing incrementally as a more positive outlook about the country has been gradually emerging. More investors believe an economic recovery in India has entered a sustainable level, although I think there is still a lot of caution on how long it'll take; the reason why venture capital has been slower to invest in the country. This is true though of most nations around the world.
In 2009, venture capital largely dried up in India as it dropped close to have of what was invested in 2008. In 2009 only 82 deals were made with a value of $444 million, while in 2008 154 deals were made worth $841 million.
Deals being made now are related to growth sectors the venture capital firms have been targeting for some time, so until things improve across the board, we'll see a very targeted approach to venture capital investment in India, with only the best-looking companies being invested in.
Past investing in Indian companies many of the venture capital companies just through a lot of money around following the herd, without checking more deeply into the business model and whether or not it had the potential to offer good returns.
That has changed now, and that's good for everyone concerned.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
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