VC investment in India down 27 per cent in Q1: Dow Jones VentureSource

23 May 2008

Mumbai: While the size of venture capital deals grows in the US, Europe and China, venture capitalists continue to do more thrifty deals in India, according to the Quarterly India Venture Capital Report by Dow Jones VentureSource.

The median size of a venture investment in an India-based company in the first quarter of 2008 was $4.1 million, down from $8.3 million in 2007 and well below the medians seen in the US ($7.1 million), Europe ($4.5 million) and China ($10 million).

The Quarterly India Venture Capital Report covers venture capital investment specifically, which Dow Jones VentureSource defines as growth capital made available to entrepreneurial companies in exchange for ownership in the form of private securities.

These investments are often seen as shorter-term and do not include private equity investments such as leveraged buyouts or mezzanine and debt financing.

The report says that overall, the region attracted $99 million in venture investment with 16 deals completed, a 27 per cent drop from the fourth quarter that saw a record $135 million put into 17 deals.

"Venture investment in India did see a drop in the first quarter from the fourth quarter but it's not really accurate to compare this year's first quarter to the big spike we saw in the first quarter of 2007 when $513 million was put into 37 deals," said Jessica Canning, Director of Global Research for Dow Jones VentureSource.