Venture capital firms invested about $762 million in over 206 deals in India during the twelve
months ended December 2012, according to a study by Venture Intelligence. Investment activity declined by 7.2% as compared to 2011, which had witnessed $1,094 million being invested across 222 deals. The amount invested declined by 30% suggesting a marked preference for smaller ticket investments.
VCs made 133 investments worth about $381 million in Information Technology and IT-Enabled services (IT & ITES). IT & ITES accounted for 65% of the investments made in 2012 and accounted for 50% in value terms. While the volume of investments in IT & ITES climbed 8% in 2012 as compared to 2011, IT & ITES saw a decline of 32% in the value of VC investments year-on-year in 2012. The research company claims that the decline is due to the fact that formerly VC-backed IT start-ups graduated to receive significant sized PE rounds during 2012.
Other sectors like healthcare & life sciences industry attracted 18 VC investments worth $98 million during the year. Education industry attracted 14 investments worth $53 million, Financial services and Energy industry with 10 investments worth $55 million and 9 investments worth $62 million respectively.
Investments by region: Companies based in South India accounted for 45% of all VC investments (56% by value) during 2012, Western India accounted for 25% (12% by value) and North India accounted for 23% of the investments in 2012 (22% by value). Companies headquartered in Bangalore accounted for the most number of VC investments with 62 investments, followed by National Capital Region (including New Delhi, Gurgaon and Noida) based companies that accounted for 45 investments and Mumbai based companies with 39 investments. Chennai and Hyderabad followed with 14 deals and 12 deals respectively.
Most active VCs: Blume Ventures, with 23 investments, was the most active VC in the year 2012. Twelve of Blume’s investments were in online services companies, four in Enterprise Software companies, two each in Mobile Gaming and Communication Tech one each in Retail Consulting, Healthcare and Mobile VAS.
Accel India and Sequoia Capital India made 12 investments each, while Accel India made 10 new investments, Sequoia made eight new investments. Nexus Ventures and IDG Ventures India made nine investments each, while Nexus and IDG made six and four new investments respectively. Kalaari Capital (formerly IndoUS Ventures) made eight investments while Helion Ventures and Inventus Capital Partners made seven investments each in India-based companies.
Early Stage Investments: Early stage investments accounted for 82% of all VC investments in volume terms and 58% in value terms during 2012. This also explains the decrease in the value of the investment for the year 2012, as early stage investments are typically made for a much smaller amount.