Investments by venture capital firms in India witnessed a steep fall at $117 million over 27 deals during the six months ended June 30, 2009, against $413 million invested across 67 deals during the six months ended June 30, 2008.
With 14 investments worth about $75 million, IT and ITeS companies accounted for about 52% of the deals (63% in value terms) during first half 2009. Within IT & ITeS, online services companies retained their status as the favourite sector accounting for 57% of the investments (by volume) within the industry during the first half of 2009, according to a study by Venture Intelligence in partnership with the Global-India Venture Capital Association (GIVCA).
?While the uncertainty in global financial markets over the last six months has affected VCs investing in India, there are clear signs of revival over the last couple of months ? especially in emerging markets like India,? said Sudhir Sethi, director of GIVCA and founder chairman and managing director of IDG Ventures India.
Early-stage deals (first or second round of VC investments into companies that are less than five years old) accounted for two-thirds of the VC investments (and 57% in value terms) during the first half of the current year.
Domestic demand-driven sectors like financial services, especially microfinance, healthcare and education are the other industries that continue attract VC attention, the research shows.