‘Clean technology will be one of the more heavily invested segments in India this year’

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: Mohanjit Jolly is the face of Draper Fisher Jurvetson (DFJ) in India. With over $4.5 billion in capital commitments, DFJ has funded global technology companies like Hotmail (acquired by Microsoft) and Overture (acquired by Yahoo), Skype (acquired by eBay). Jolly set up DFJ office in India in September, 2007. He sits on the boards of Reva, Mchek, Canvera, Cleartrip, Attero, Seventymm, and Naseeb Networks. In an interview with The Financial Express, he talks about the potential of venture capital investment in clean technology in India. Excerpts:

While the venture investment in clean technology went up globally in 2008, it fell in India. What could be the reasons for it?

The drop in clean technology venture investment in India is not surprising. Most venture investors in India started out as early stage technology investors. Now many have moved to a stage and sector agnostic approach to venture investing. Although there is a lot of interest in, and some might argue, hype around clean technology, it requires a certain level of sophistication and expertise—whether directly within a firm or outside of it through advisers. There is often a need for deeper pockets, as many of the cleantech initiatives are capital intensive. It’s a phased approach within India where 2008 was perhaps more a period when VCs were trying to figure out the areas that they need to focus on and educate themselves about. I think this year you will actually start to see the results of that education phase.

How will global slowdown affect venture investment in clean technology in India?

Loosely speaking, venture investments tend to fall in two categories. The first category is ‘vitamins’. The second category is a ‘cancer drug’. During good times, even vitamins sell. There is a disposable income base and people experiment with buying products or services they can afford to. It’s not necessarily because they need to. The cancer drug category is where price insensitivity comes in. It’s a pain point that needs to be addressed or it’s a case of not a ‘nice to have’, but a ‘must have’. I would put clean technology space into must-have rather than nice-to-have category from an investment standpoint. The overall venture investment pace will slow this year, and it will have an impact on clean technology investment as well. Having said that, I still predict cleantech investments as being one of the more heavily invested segments in India in 2009.