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New Enterprise Associates may defer fresh India investments for a year

13 September, 2017

Global venture capital firm New Enterprise Associates (NEA), which has been investing in India for over a decade, is likely to wait for at least a year before making fresh investments in the country, according to a media report.

This is mainly on account of the disappointing performance of its portfolio companies, Mint reported citing two unnamed persons. NEA, however, remains interested in India, the persons said.

Ravi Viswanathan, general partner at NEA, told the business daily that the way forward for the VC firm would be to “create value globally through a combination of direct investments and co-investments in partnership with local independent teams.”

An email query sent to NEA did not elicit a response till the time of filing this article.

NEA’s decision to hold back fresh investments in the country comes amid reports that Bala Deshpande, India head of NEA, is floating an independent investment firm called MegaDelta Capital Advisors.

Notably, NEA is also likely to invest in MegaDelta Capital, which is looking to raise $250-300 million. Viswanathan told the business daily that it has adopted a similar approach in China where NEA has helped establish two funds over the past several years.

The venture capital firm’s latest investment was in Bengaluru-based MWYN Tech Pvt. Ltd, which runs fin-tech startup MoneyTap. It also invested in Naaptol, Davita Care India and FirstCry, among others.

NEA’s decision to go slow on India comes amid a drop in venture capital deals in the country from the highs of 2015.

According to VCCEdge, the data research platform of News Corp VCCircle, the number of venture deals dropped to 441 in 2016 from 598 in 2015. Deal value dropped to $3.38 billion last year from $6.33 billion in the previous year.

The number of venture deals stood at 225 with a total value of $2.18 billion from 1 January to 13 September 2017.

Despite the drop in deal numbers, other global venture capital firms such as Sequoia Capital, Accel Partners and SAIF Partners have been raising new India-focussed funds.

In June, Sequoia Capital topped up its fourth India-focussed fund for the second time, by $125 million, even as the venture capital firm reportedly closed its fifth India-focussed fund worth $920 million last year.

In July, SAIF Partners raised $350 million (Rs 2,247 crore) for a new fund.

Besides, other domestic VC funds such as IDG Ventures, Fireside Ventures, Stellaris and Endiya Partners have either made the first or final close of their funds to invest in startups.

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New Enterprise Associates may defer fresh India investments for a year

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