Venture capital transactions (early stage transactions as opposed to late stage or growth private equity) revived in line with the improved investment climate in the country. Although VC firms continued to be risk averse with not a single venture capitalist matching $50-million investment that the top two VC firms brought in the previous year, they struck more deals and a number of firms invested $20-25 million each. Helion Advisors managed to be the only VC firm to retain a place in the top VC firms for the second successive year, according to data from VCCedge, the financial research platform of VCCircle. Nexus Venture Partners and Draper Fisher Jurvetson India deserve honourable mentions in our list of VC chartbusters of 2010 despite losing out marginally among the top five most active VC firms by deal value. (Note: The ranking is based on the announced deal value. If the deal value is not known, that will not reflect. We have only considered venture capital transactions for this ranking.)
Sequoia Capital India
Number of deals: 7
Announced investments: $41 million
Sequoia had a fairly busy year with the public float of its portfolio company SKS Microfinance (and its topsy-turvy performance since then) and a profitable exit from consumer products company Paras Pharmaceuticals in one of the biggest PE/VC exits this year. The firm, that has become one of the most prolific VC deal-makers in India having invested in more than 50 companies during the past decade, came back after a slow year to hit top of the chart in 2010 in terms of announced deal value. Most of Sequoia’s investments revolved around the technology sector although they were spread across outsourcing, mobile and consumer internet spaces. Its investments include Via (earlier Flightraja), Druvaa Software, July Systems, Equitas Microfinance, Axtria and more recently companies like iYogi and Fashionandyou.com.
Tata Capital Private Equity
Number of deals: 3
Announced investments: $29.5 million
One of the country’s biggest business houses, the Tata Group faced starting troubles with its foray into formal private equity business losing its head (Shailendra Bhandari who was roped in after his former firm Centurion Bank was acquired and merged with HDFC Bank) even before completing the maiden fund raising exercise. But the firm managed to count itself in among the top VC investors in its first year of full-fledged investments. The firm that chases growth as well as expansion capital with ticket size of $15-50 million in almost all sectors ‘outside of real estate’ is said to have invested in two healthcare firms besides Sun Catalytix Corporation, an energy storage and renewable fuels company.
Helion Advisors Pvt. Ltd.
Number of deals: 8
Announced investments: $26.4 million
The venture capital firm, which originally began building its India exposure with a play on outsourcing and more recently bit into the consumer story, ramped up activity in terms of both investments and deal volume by about 50% over 2009. It invested in some interesting niche players including Agni Property Group, that calls itself India’s first professional brokerage firm, and Exclusively.in, a flash sale website offering high-end products in areas like Indian fashion and home décor. It also participated in further round of funding of some existing portfolio firms such as online ad network Komli Media and PubMatic, a provider of ad revenue optimization technology for online publishers. Other deals included Jivox, NetAmbit, Webaroo and Spring Leaf Retail.
Canaan Advisors Pvt. Ltd.
Number of deals: 4
Announced investments: $25 million
Canaan invested in a handful of firms but put in enough to ride among the top VC players in the country. The VC firm that targets investments in technology (digital media, communications, enterprise and cleantech) and healthcare (biopharma, medical devices and diagnostics) sectors invested in e-commerce firm Naaptol Online Shopping, micro-finance firm Equitas Microfinance besides participating in an additional round of funding in its portfolio firm iYogi, a remote consumer tech support company. With $3 billion under management, the VC firm that has raised eight funds till date also counts Chakpak Media, Bharat Matrimony, Cellcast and techTribe among its existing investments in India.
International Finance Corp.
Number of deals: 5
Announced investments: $24.4 million
Whether it is transactions in the private equity or venture capital space, IFC, the private sector investment arm of the World Bank, is never far from action. One of the most consistent top investors in India, IFC nudged aside some other VC firms to emerge in our list of most active firms in the venture capital space in 2010. IFC, that has been active in India for over half a century and has invested in 199 companies (providing nearly $4.33 billion in financing for its own account and $1.02 billion for the accounts of participants in IFC’s loan syndication program), focuses on private sector involvement in infrastructure financing, restructuring of the manufacturing and services sectors and development of new financial institutions and products. In 2010, it supported firms such as solar power generator Sunborne Energy, financial receivables firm India Collections Management Pvt Ltd and Swadhaar FinServe Pvt Ltd, an urban focused microfinance institution.