Indian IT sector upsets Chinese applecart in venture capital deals
Says Karthik Reddy, managing partner of Blume Ventures, a VC fund with a R100-crore corpus, “These start-ups have the advantage of providing a readily available large captive domestic market where other companies cannot enter due to language and regulatory issues.”
In China, the VC investments in IT roughly average around 15% of the total investments, while in India IT accounts for 65% of the funding. For early-stage VC fund Accel Partners, the $260-million India fund focuses only on technology, while in China it is across sectors with a corpus size of $2.5 billion.
Prashanth Prakash, partner, Accel Partners India, feels it will be tough for Chinese companies to replicate the product engineering expertise that IT product companies in India have developed over the years.
“The product companies in China are not yet serving global clients like the Indian peers. When they will try to go global, they will find it difficult to do the language transition.”
But India cannot afford to rest on its laurels, feel analysts. Says Kumar R Parakala, KPMG, head of IT Advisory, the investment in academics, along with the collaboration with industry and huge money poured by angel investors and VCs, is also fueling innovation in product space as well. “There
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