VCCircle

Mentor Partners, the Bangalore-based early-stage venture capital advisory firm, has been working with startups for the last two years. The firm usually draws into the purses of a group of individual investors whenever an investment opportunity comes up. But not having a fund of your own may not be a great idea if your full time job is to mentor startups and scout for good investment opportunities.
Mentor Partners is now planning to raise its first fund of $30-50 million in the next six to nine months, reports The Economic Times, quoting Mentor Partners managing director Ravi Narayan. Initially, it will be focused on Indian market but the funds can be used for investing in other Asian markets like Singapore and Malaysia.
Formed in December 2005, Mentor has invested in 7 companies including Ilantus Technologies, Ugenie, Bubble Motion, Atlantis Computing, atOnePlace.com and Elina Networks. It is now in the process of incubating inhouse, a firm focused on mentoring SMEs using an IT-enabled platform.
Currently there are few funds targeting the early stage investment opportunities. They include Seed Fund ($10 million), Erasmic Fund, and VentureEast Tenet Fund II.

i2india Holdings Ltd, a technology commercialisation and investment firm focused on creating commercial value out of intellectual property created in India, has raised £1.5 million ($3.09 million) in seed funding from individual investors like DS Brar and Donal Peck of Actis. i2india is the Indian arm of UK's Imperial Innovations Group Plc, a company based out of Imperial College London and listed in the Alternative Investment Market of London Stock Exchange. Imperial Innovations, which has equity holdings in 74 technology businesses, will hold 35 per cent stake in i2india Holdings.
Susan Searle, CEO of Imperial Innovations, joins the board of i2india as a director alongside Chris Mathias, an entrepreneur and co-founder of Conduit Communications, a software and web development company. The seed funding for i2india was raised from a group of investors which include Imperial Innovations, Chris Mathias, and i2india's advisory board members such as DS Brar, Chairman of GVK Biosciences Ltd, Donald Peck, Managing Partner of Actis India, and Graham Wrigley ex-senior partner of Permira, Imperial said in the statement.
i2india would focus on the IP arising from a range of Indian research institutes, universities, research organisations and corporations, organisations with which Imperial Innovations and Chris Mathias, Chairman of i2India, have strong relationships, the release added.

Jasper, a Delhi-based early stage startup focused on retail sector, has secured angel funding from a group of US investors. The startup is in stealth mode. Jasper founder and CEO Kunal Bahl said that the company will help increase sales in a retail mall by incentivising the purchase. Retail outlets will be their partners, while the shoppers are the end customers of Jasper.
“The problem in the booming organised retail sector in India is high footfall-low conversion. We are adopting an innovative strategy to help solve this problem,” says Bahl, an engineering graduate of University of Pennsylvania, and an MBA from Wharton. Bahl has earlier worked with Microsoft's emerging markets group.
The angel investors are based in the US, and have previously backed companies such as Nasdaq-listed House Values, Yapta and Cleverset. The funds will be utilised for building an operations engine, and undertaking tactical marketing initiatives, a release said.

India's department of science and technology may join hands with The Indus Entrepreneurs (TiE) and the Indian School of Business (ISB) to launch a seed fund. The initial corpus for the fund is likely to be Rs 75 crore or $19 million, reports Business Standard. The report quotes AS Rao, adviser, Department of Scientific & Industrial Research (DSIR), as saying that the fund would focus on product innovation and intellectual property-based solutions. The framework may be finalised by March 2008. The idea has been inspired by the Israel government's Chief Scientist model, which encompasses incubator and R&D programmes, besides investment grants.
In July, Nasscom had announced a $25 million Indian Innovation Fund in public-private partnership to invest in tech startups. Does anyone have an update on that?

Myntra Designs, a Bangalore-based company that provides customised gifts and merchandise such as T-shirts, mugs, key chains and other consumer products, has raised an undisclosed amount of funding from early stage VC firm Erasmic Venture Fund and other investors like Sasha Mirchandani of Mumbai Angels.
Mirchandani has joined the board of the company.
The funds will be used for procuring advanced technology for on-demand printing, scaling up the operations, and undertaking new marketing initiatives, a release from the company said. Myntra was founded in July last year by Mukesh Bansal, an IIT Kanpur graduate. Bansal said the funding covers one year's operational expenditure.
Myntra essentially offers consumers the power to design their own gifts and merchandise. There are several offline merchandise companies in India, but they serve corporate clients rather than retail consumer. One such company - Hyderabad based eYantra - received funding from media group Bennett, Coleman and Company early this year.
This is the third investment from Bangalore-based Erasmic, which has also funded travel information portal HolidayIQ and search engine optimisation company Position2.

Asit Koticha of ASK Group has made an early stage investment in a high-end beauty salon, VC Circle has learned. Kotecha, the owner of the Mumbai-based institutional stock broking and financial services group, has invested an undisclosed sum in the Indian franchisee of Jean Claude Biguine (JCB), a leading French beauty house with 350 salons and spas spanning across 17 countries.
JCB has some 4000 stylists worldwide servicing over 18,000 customers daily. The company is set to start its first outlet in Mumbai next month. It plans to set up outlets in other metros too.
Strides International, a Mumbai-based boutique strategic and financial advisory firm, were the lead advisors on this transaction.
Asit Kotecha is believed to be a private equity investor too, besides running ASK Securities and ASK Financial. They had recently bought out US financial services company Raymaond James from their Indian joint venture ASK Raymond James

Hyderabad-based mobile applications service provider NetXcell has raised $1 million in their first round of funding from Ike Lee, a venture partner at Ignition Partners, and Ruderman Capital, according to a release. It plans to raise a total of $3 million to fund its expansion activities.
NetXcell apparently plans to set up an office in Dallas, Texas, where the company's executive chairman Dayakar Puskoor is based. It plans to become a value added services player not only for telecom but also for media companies. NetXcell has signed an MoU with Lifestyle Wireless, US.

Exclusive: There is good news for early stage entrepreneurs in India. Draper Fisher Jurvetson, Silicon Valley's leading venture capital fund focused on early stage companies, is setting up on the ground presence in India. DFJ, as it's popularly called, is moving one of its directors Mohanjit Jolly (pictured; bio here) to Bangalore to its soon-to-be-set up India office. Jolly has confirmed his move to India's tech capital in an email to VC Circle, and he said he would be in India in early September.

The move is significant since this is the first time DFJ having a physical presence. Jolly recently moved to DFJ from Garage Technology Ventures, a seed and early stage venture capital firm founded by Guy Kawasaki. Jolly was a managing director at Garage, where he worked with over 30 companies such as LeftHand Networks, PureSight (BCGI), Kaboodle and SimplyHired.

Past India Investments

DFJ has been investing in India on and off, though. It has made the initial investment of $2 million in online DVD rental company Seventymm, and made several co-investments in firms like online ad network Komli (along with Helion Venture Partners), and $20 million in Bangalore-based electric car maker Reva (along with Global Environment Fund). The other Indian entrepreneurs backed by DFJ include Sabeer Bhatia of Hotmail, Pavni Diwanji of MailFrontier, and Pankaj Shah of 4info.

DFJ has allocated $75 million for investing in India over the next three years from its Fund IX of $600 milion. An India specific fund is not on cards yet. In late 2005, Tim Draper, the founder and managing director of DFJ, had said that the firm would look at launching a $200 million fund for India. He had also said that the firm would look at early stage opportunities in India.

Global Push

It's not just India on DFJ's radar. The firm is also looking at entering other countries like Turkey, Russia, Japan, Korea, and Israel. Early this month, DFJ announced that it's partnering with Esprit Capital Partners, a top tier European venture capital firm to form DFJ Esprit in Europe.

In fact, over the last 16 years, DFJ has created a collaborative network of venture capital partnerships. The firm now has more than 120 venture capital professionals, stationed across 30 cities in the US, Asia, Europe and South America. It has some $5.5 billion in capital commitments spread over 22 funds. Some of DFJ's successes include Hotmail (acquired by Microsoft), Chinese search engine company Baidu ($109-milion IPO), Skype (acquired by Ebay), United Online, and Overture (acquired by Yahoo).

DFJ's earlier international foray was led by a joint fund called DFJ ePlanet Ventures formed in 1999-2000. They had a $650 million global fund, and their investments included China's Baidu and Skype. But the two firms decided to split in 2006 and go solo in in their international investing forays.

Who Will Follow Suit?

You can see more Silicon Valley based venture capital firms setting up shop in India. The most immediate candidates to have on the ground presence in India will be Norwest Venture Partners, Greylock Partners (which recently debuted in India with an investment in payment company TechProcess), and Lightspeed Venture Partners. Norwest, which has already invested $70 million in five Indian companies, is likely to set up office in India as early as September. Reports also suggest that NVP may station three partners in the country.

Update: Jolly informs that Sateesh Andra has also joined DFJ in India as a Venture Partner. Andra, currently based in Hyderabad, has spent some about 15 years in Silicon Valley as an entrepreneur. He founded Metrikus (acquired by Persistent Systems) and co-founded Euclid (acquired by e4e). The DFJ team will also include a couple of analysts in the future. "Of the current Fund IX which is $600 milion in size, $75 million is allocated for India over the next three years (between investments and reserves)," Jolly says.

Adman Suhel Seth and his younger brother Swapan Seth has backed a YouTube clone www.TheBig.tv, reports Exchange4Media.com The other investors in the company include Gaggan Duggal, the owner of international mobile sim cards company Matrix (you can see some commercials of Matrix on the site already). The venture is started by an ex-NDTV emlpoyee, Alankar Jain.

Suhel Seth is a well-known socialite, TV commentator, and also the founder of advertising agency Equus Red Cell. Swapan Seth is the CEO of Equus Red Cell.

The company claims to Exchange4Media that it will be different from YouTube as it plans to create its own content, besides what users upload on their own (user generated content). It essentially wants to become an online TV channel. Nautanki.tv, which got an undisclosed angel funding early this year, is already in this space.

It remains to be seen if the company can create compelling content and capture audience. End of the day, it all boils down to one thing - how many people watch your programming. It will be a long while, though.

PS: By the way, can somebody create at least a short, 5-minute or 10-minute show everyday which can make people come to the site to watch it daily? Rocktboom.com is doing that successfully, and it makes money too selling advertising. A similar site, financial video blog WallStrip.com was acquired by CBS for $5 million in about one year of its existence. This blog, which had one good looking show host Lindsay Campbell, had created a good buzz before selling out. Probably Rakhi Sawant has a potential to become a killer online show host and rake in money!

Ex-PayPal executive Sanjay Bhargava has joined hands with three other young entrepreneurs (see team here) in India to launch a startup in the consumer finance domain. The company - Eko.co.in - is in stealth mode, and all that we know is that it will use mobile in bringing down the cost of financial services. The company is currently seeking partnership with banks, insurance providers and telcos for building the product.

Bhargava was one of the first few employees of PayPal (a company that pioneerd alternative payment systems on the internet). He was a VP, Payments, at PayPal, and one of the main architects of the PayPal back end. A bio of Bhargava on Eko site says that he expects the new startup to "have an impact on financial inclusion that will be greater than all of his previous successes combined". [Via VentureWoods.org]