Processing .....please wait.. 
The article has been forwarded.... 
News >> General >>
Online advertising and e-commerce companies grab VC firms' attraction
By siliconindia
|
Wednesday, 21 July 2010, 22:29 IST
Kolkata: Digital advertising and e-commerce firms in India are catching the fancy of private equity (PE) and venture capital (VC) firms. PE and VC investments in the online advertising and marketing space, which had gone down to $16 million in the first half of 2009, have shown a recovery and touched $28 million, or 
129 crore, in the first half of this year, reports Sutanuka Ghosal from The Economic Times.
Talking to ET, Mahendra Swarup, president, Indian Venture Capital Association, said: "Both PE and VC firms are active in the online advertising and marketing space. In fact, VC funds are more active in the sector as returns are higher. Typically, expectation of VC and PE firms is three-to-five times of their investments. But, in the case of digital advertising and marketing, which largely deal with mobile ad network, the expectation is 8-12 times of the investments."
The deal size in this sector varies between $5 million and $15 million. According to Venture Intelligence, a research service focused on private equity and M&A, the four deals that have already taken place in this sector in the first six months are valued at $28 million.
VC and PE firms, such as Helion Ventures, Nexus Ventures, DFJ, Norwest Ventures and Matrix Partners India, amongst others, have invested in this sector, the firm said.
Sudhir Sethi, chairman & managing director, IDG Ventures India, said that VC funding will increase in the mobile ad network companies and in e-commerce companies going forward. "These are emerging as the hottest sectors for VC funding. Similarly, a lot of PE/VC funding will be witnessed after the rollout of 3G services in the country. We are extremely positive about these sectors," said Sethi.
Swarup said that in the recent past, Bangalore-based mobile ad network company InMobi, previously known as mKhoj, has raised Rs 37 crore ($8 million) funding from VC firms Kleiner Perkins Caufield and Byers (KPCB) and Sherpalo Ventures. "More deals are expected to take place in the next six months. PE and VC investments will take place in e-commerce firms that deal with activities like e-ticketing and other such activities," he added.
Interestingly, according to the 2010 Global Venture Capital Survey by Deloitte and the National Venture Capital Association in the U.S., more than 90 percent of the respondents expect the number of VC firms to decrease between 2010 and 2015, while they expect the number of such firm in China, India and Brazil to increase during the same period.
129 crore, in the first half of this year, reports Sutanuka Ghosal from The Economic Times.
Talking to ET, Mahendra Swarup, president, Indian Venture Capital Association, said: "Both PE and VC firms are active in the online advertising and marketing space. In fact, VC funds are more active in the sector as returns are higher. Typically, expectation of VC and PE firms is three-to-five times of their investments. But, in the case of digital advertising and marketing, which largely deal with mobile ad network, the expectation is 8-12 times of the investments."
The deal size in this sector varies between $5 million and $15 million. According to Venture Intelligence, a research service focused on private equity and M&A, the four deals that have already taken place in this sector in the first six months are valued at $28 million.
VC and PE firms, such as Helion Ventures, Nexus Ventures, DFJ, Norwest Ventures and Matrix Partners India, amongst others, have invested in this sector, the firm said.
Sudhir Sethi, chairman & managing director, IDG Ventures India, said that VC funding will increase in the mobile ad network companies and in e-commerce companies going forward. "These are emerging as the hottest sectors for VC funding. Similarly, a lot of PE/VC funding will be witnessed after the rollout of 3G services in the country. We are extremely positive about these sectors," said Sethi.
Swarup said that in the recent past, Bangalore-based mobile ad network company InMobi, previously known as mKhoj, has raised Rs 37 crore ($8 million) funding from VC firms Kleiner Perkins Caufield and Byers (KPCB) and Sherpalo Ventures. "More deals are expected to take place in the next six months. PE and VC investments will take place in e-commerce firms that deal with activities like e-ticketing and other such activities," he added.
Interestingly, according to the 2010 Global Venture Capital Survey by Deloitte and the National Venture Capital Association in the U.S., more than 90 percent of the respondents expect the number of VC firms to decrease between 2010 and 2015, while they expect the number of such firm in China, India and Brazil to increase during the same period.