The believers: Top 5 investors in Indian Internet

29 May, 2012

The e-commerce 2.0 world is clearly split between those who are screaming excess (read: bubble) and the so-called believers, who feel that the time has come for Indian Internet firms to make it big. The first set, waiting to say I-told-you-so, got a leg-up when Facebook saw its share price shrink after a blockbuster opening at the NASDAQ. And the latter scored a big point a couple of years ago when the OTA MakeMyTrip listed in the US and Flipkart broke out of the crowd and reportedly hit close to a billion dollar valuation mark.

This second set includes a mix of tech startups looking to make it big, as well as investors who hope to help the entrepreneurs do so. As the last 12 months have seen a string of large investments in the Internet space (all top five Internet funding deals in India have been inked during this time frame), Techcircle.in brings you the list of most active investors in the field of Internet and Internet-based services (be it Cloud telephony, SaaS or Internet radio, to name a few). These include venture capital firms, as well as multi-asset investment fund management companies. The ranking is based on the number of deals and not on the value of investment, which is not disclosed in many cases (moreover, one large investment in one firm may not mean that the investor is betting on the industry at large).

Accel Partners: By far the most prolific investor in Indian Internet space, venture capital firm Accel Partners has made as many as 19 investments. The firm, which typically invests up to $3 million in early-seed stage of a startup, has a roster of a few blockbuster investments like Flipkart (where it is sitting on a multi-bagger) besides a string of other names across e-commerce, SaaS and digital media. The fund has also seen three exits so far. These include the consolidation of businesses when it sold Chakpak, split between its portfolio firms Trivone and Flipkart; an exit from the travel portal called HolidayIQ.com and another consolidation move when Letsbuy was sold to Flipkart. Recently, Subrata Mitra, one of the partners managing the Indian investments, was named among the top 100 global tech investors.

Tiger Global: The hedge fund and private equity investment firm is an outlier among other VC firms in this list. But the investment firm has been one of the more bullish early-stage investors in tech startups across the world. With as many as 15 portfolio companies in the Internet space, it beats many of the VC firms operating in the country. It has been a co-investor with Accel Partners in firms like Flipkart, Zansaar and Myntra, and also bet larger amounts in other firms including Makemytrip.com and the IPO-bound JustDial. Known to maintain a rather quiet profile, Tiger Global could well be one of the biggest investors in the business in terms of actual investment value.

SAIF Partners: The private equity firm has been fairly active in betting on early-stage tech investments in India, with the belief that Indian Internet firms can replicate the success stories of Chinese Internet companies. The PE firm has already recorded the big hit by successfully seeing through the IPO of MakeMyTrip on NASDAQ and is now all set to launch what would be the biggest IPO by an Indian Internet firm when another portfolio firm JustDial goes public. The investor has also bet on HomeShop18, another large hybrid e-commerce player who is as big as Flipkart if its TV shopping business is factored in. SAIF has also invested in mobile Internet firm One97 Communications and runs a joint fund under One97 Mobility Fund.

Nexus Venture Partners; Helion Venture Partners; Seedfund: The three are tied at the fourth spot.

Nexus has spread its dozen-plus Internet investments across various businesses like e-commerce and gaming. While its biggest hit has been Snapdeal, the deal site that has now become a general e-commerce site, Nexus has also invested in firms like handicraft and natural products portal craftsvilla.com, general e-com site Yebhi.com, Salorix and Unmetric among others. Nexus has also made a string of successful exits through strategic or secondary sale mode. These include OLX (Naspers), Netmagic (NTT), Gluster (Red Hat), Dimdim (Salesforce) and Games2win (Nirvana Venture), to name a few.

Helion, which raised its third VC fund with a corpus of $255 million, has been a co-investor in Flipkart and also in the now defunct Letsbuy. It has also spread its investments in the OTA business following its success with MakeMyTrip, and funded other players in the space including the bus ticket booking site Redbus. It has just made an investment in lifestyle ecom startup Fashionara.

Seedfund, as an early stage VC fund, has also spread its investments across a mix of Internet related properties including ecommerce and digital media. This is despite one of the fund’s co-founders voicing concerns about the sustainability of ecommerce business, as it exists, in India. With investments such as RedBus, car buying and selling website carwale.com, a personal finance assistance portal Rupeetalk, men’s fashion e-tailer fetise.com and more, it has been trying to pick e-com verticals which are not too crowded.

IndoUS Venture; Sequoia Capital: The two VC firms are tied at the fifth spot on the basis of announced deals in Indian Internet space (some deals are not disclosed by some investors and so one of them could actually be more active than others).

IndoUS has in its portfolio names like Snapdeal, Myntra, Via, Zivame and Indiaplaza (one of the oldest surviving e-commerce firms). It has recently funded the digital magazine store Magzter.

Sequoia is another prolific and consistent investor in the Internet space, backing firms such as Cloud telephony startup Knowlarity, JustDial, online payment services company Zaak ePayment, online recharge shop Freecharge, online health store Healthkart and fashion e-tailer Fashionandyou, among others.


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The believers: Top 5 investors in Indian Internet

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