Investments from the venture capitalists have grown five folds at $777 million in India during the first three quarter of 2007 as against an investment of $158 million during the corresponding period last year. The amount is even more than double the total investment of $320 million in the country during 2005.
About 54% of all venture deals in the country were for companies in the Information Technology (IT) space. As many as 31 rounds were completed in the first three quarters, accounting for more than $327 million worth of investment, according to the ?Quarterly India Venture Capital Report? published by Dow Jones VentureOne and Ernst & Young.
Within India?s IT industry, the first nine months of 2007 saw more than $113 million invested in 17 deals in the information services sector, which is a four- fold increase over the $27 million invested in this sector during the same period last year. Information services include many of today?s web-based innovations, such as mapping services, social networks and online advertising, the report said.
?Though, the majority of financing rounds in the first nine months of 2007 were struck in the IT industry, the business, consumer and retail industry attracted the most venture capital with $376 million invested during this period,? said Dilip Dusija, Venture Capital Advisory Group leader of Ernst & Young in India.
Venture capitalists have also committed $95 million in eight deals for communications and networks companies in the country during the same period, the most deals and investment for the sector on record.
The service-oriented companies were also a popular draw for venture capitalists investing in business/consumer/retail industry in the country. ?One reason service-oriented companies in India are so attractive to investors is because they often do not require a great deal of capitalisation to get off the ground,? said Jessica Canning, director of global research for Dow Jones VentureOne.
