Venture capital investments saw an upswing in activity in 2011 with e-commerce taking off in a big way. Most venture capital firms had multiple exposures to this space – either through fashion, baby products, or generic e-tailers. The year also saw emergence of nearly half a dozen seed-stage funds looking to raise $20 million-$25 million to plug the gap between angel funding and series A round. Here are the most active venture capital firms in 2011.

By Value

Sequoia Capital India ($69.5 million): Sequoia Capital, the US-based marquee venture capital firm which backed companies like Google and Apple, kept up the investment pace in spite of the departure of all four founding MDs of its India office. The venture capital firm, currently investing from a $300 million fund raised in 2008, continued to invest in the e-commerce space besides focusing on areas like mobile and healthcare. Most recently, Sequoia invested $4 million in Freecultr, an apparel e-com venture backed by the Smile Group. It also completed several follow-on rounds in 2011. While the venture firm is focusing on India consumer Internet, it also has a big focus area of Cloud and Big Data globally.

Intel Capital ($66.2 million): The corporate venture capital arm of the world’s largest chipmaker Intel Corporation had a fairly busy 2011. Besides closing nearly half a dozen deals, Intel Capital is also looking to allocate a new corpus to India.  The firm currently invests from the $250 million Intel Capital India Technology Fund set up in December 2005.

Some of Intel Capital’s fresh investments in 2011 included Saankhya Labs, a fabless semiconductor company; Testing Czars, an independent test engineering and solutions provider for mobile applications; What’s on India, a television programme guide; enStage, an electronic payment solutions company and Duron Energy, an affordable solar power products designer for off-grid use. It also made several bets on consumer Internet and e-commerce space, backing Smile Group firms and, in addition to InfoEdge-backed insurance aggregator portal

Nexus Venture Partners ($62 million): Nexus Venture Partners continued to focus on technology and Internet start-ups in 2011, completing 10 transactions in the process. It also went on investing in Indo-US start-ups through its office in Silicon Valley. The venture firm made multiple bets on Indian e-commerce firms and Cloud-based companies during the year.

Its investments included (largest online wholesaler for unique handmade luxury products) and (largest group buying site), besides a follow-on round in BigshoeBazaar. Nexus also backed Aryaka Networks that delivers Cloud-based application acceleration and WAN optimisation, and Genwi, a Cloud publishing firm on mobile.

Nexus also saw quite a few exits as Gluster was acquired by Red Hat, DimDim was sold to Salesforce, to Citrix and MagicRooms to Yatra Online.

Canaan Partners ($56.2 million): Silicon Valley-based Canaan Partners invested in two fresh deals in 2011 while it participated in four follow-on rounds of its portfolio companies. Canaan Partners led a $45 million round in Happiest Minds Technologies, an IT solutions and services start-up founded by former MindTree Ltd chairman and co-founder Ashok Soota. The deal was one of the most sought after, with reports suggesting that firms like the Carlyle Group, IDG Ventures, Walden International and Sequoia Capital were in the fray for the deal.

It also invested $4.4 million in Mumbai-based Loylty Rewardz Mngt Pvt Ltd, engaged in the development and management of consumer loyalty programmes. Although Canaan stayed away from consumer Internet this year, it participated in the fresh rounds of its portfolio firms Naaptol, and Consim Info. One of its portfolio firms, Bollywood portal Chakpak, was acquired by Flipkart.

Tiger Global Management ($45.8 million): After a hiatus, Tiger Global Management returned to India with focus on the fast-growing e-commerce sector and closed over half a dozen investments in that space. Tiger Global, which had participated in large rounds of social networking companies like Facebook and LinkedIn, also changed its strategy from private equity/hedge fund-type transactions (done for NSE, JM Financial, Shriram Transport) to venture-stage  investments.

Besides making fresh investments in companies like electronics e-tailer and apparel & shoe e-tailer, it also invested in follow-on rounds of and MakeMyTrip.

By Volume

Intel Capital: 11 Deals

Intel Capital invested in more than 11 new start-ups besides follow-on rounds in five other portfolio companies in 2011. The firm also scored an exit by selling its decade-old investment in software development firm Persistent Systems with 6x returns.

(See above)

Nexus Venture Partners: 10 Deals

Besides being a prolific investor with 10 deals, Nexus Venture Partners also completed over half a dozen follow on rounds in its existing portfolio companies with new investor. The firm currently has $320 million under management across two funds and is now reportedly looking at a third fund.

(See above)

Blume Ventures: 9 Deals

Blume Ventures, a seed-stage venture capital firm set up in 2010, completed nine deals in 2011 across Internet and software space. The firm has been set up  by two members of Mumbai Angels, Sanjay Nath and Karthik Reddy, and it is currently raising a $20 million fund. Blume typically invests $100K-$250K in each company. It also makes larger investments along with angel investors like InMobi CEO & co-founder Naveen Tewari.

Blume invested in Cloud computing provider E2E Networks, social commerce platform and holiday comparison site, among others. Most recently, it invested in Sports Nest Retail (India) Pvt Ltd that runs the six-month-old e-commerce website SportsNest, focused on retailing sporting, fitness and adventure gear. 

Accel Partners: 8 Deals

Accel Partners, which has backed global Internet majors like Facebook and Groupon, made eight new disclosed investments in 2011, mostly in the Internet space. Accel, which is reportedly sitting on a multi-bagger with, upped its bet on the e-commerce sector by investing in specialised e-tailers like Babyoye and Letsbuy.

It also invested in Pristine Careers, a financial training firm for certifications like CFA; investment research firm Probe Equity and digital media technology company SureWaves. Accel recently invested in SaaS-based social customer support start-up Freshdesk and digital media & content services company Trivone Digital.

Accel Partners also raised a new $155 million venture capital fund for India. Accel India III is nearly two-and-a-half times its predecessor Accel India Venture Fund II, which raised $60 million three years ago.

With the inception of the new fund, the assets under management of Accel India reached $235 million across its three early-stage funds. 

IDG Ventures India: 6 Deals

IDG Ventures had its busiest year since setting up shop in India in 2006 as it closed six transactions across e-commerce, software and education space. This comes even as the firm plans to launch growth and mezzanine investment funds for India by 2013-14, thus expanding from its early-stage technology focus.

IDG led a $5.7 million round in Agile Financial Technologies, a BFSI software products company. It also invested in iProf Learning Solutions, a Noida-based e-learning company. Other investments included mobile software firm Sourcebits and mobile phone advertisement firm Vserv Digital. More recently, it has been focusing on e-commerce with deals like Valyoo Technologies (it owns and operates portals for eyewear, watches and bags) and (an online western fashion retailer).

Tiger Global Management: 6 Deals

Tiger Global Management, set up by former technology analyst Chase Coleman, used a shock and awe strategy backing over half a dozen e-commerce start-ups in the country in a matter of seven months. It also significantly increased its bet on travel portal MakeMyTrip, buying into the company when its other venture capital investors were exiting through a follow-on offer.

(See above)

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