125 percent jump in VC investments in India in Q2
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Bangalore: VC investment in India has made a big leap in the second quarter of the year 2008, with a majority of the fund going to advertising start-ups. Almost $89 million, nearly 37 percent of the total quarterly investment, went to five advertising or marketing companies, more than any other sector. Overall, India attracted $238 million in venture investment with 17 deals closed in the second quarter, a 120 percent increase over the $108 million invested in 12 deals during the same period in 2007, according to the Quarterly India Venture Capital Report released by Dow Jones VentureSource. "The deal flow in India remained steady for three consecutive quarters but this most recent quarter posted the second-highest investment total on record, due in large part to the $70 million second round for Laqshya Media of Mumbai, the second-largest deal ever completed in India," said Jessica Canning, Director of Global Research for Dow Jones VentureSource. "This highlights two growing trends within the region � one being a growing interest in advertising plays that capitalize on India's emerging infrastructure and growing Internet usage; the other being an increase in second-round deals, which is expected as VCs are helping their portfolio companies expand and steering them toward liquidity," she added. India saw seven second-round deals completed in the second quarter, garnering a record $161 million and exceeding the $118 million that was invested in second rounds in all of 2007. Ten seed and first round deals were also completed during the quarter, accounting for nearly $77 million in investment. Overall, India's Business & Financial Services industry, which includes the advertising/marketing sector, received $131 million investment via nine deals. Second in terms of investment was Information Technology industry, which recorded three deals and $33 million worth of investment during the second quarter, a 55 percent decline from the $73 million invested in nine deals during the same period last year. In terms of development stage, companies with active revenue streams attracted the most capital in the second quarter of 2008, as nearly $151 million went to 10 deals for companies that were shipping products and another $4 million went toward a deal for a profitable company. Just six deals, worth $83 million, were for companies currently developing products.

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