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VC investment touch $290 Million amidst liquidity crunch
By siliconindia
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Saturday, 18 October 2008, 16:59 IST |
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Mumbai: The tightened liquidity has not yet touched the purse of venture capitalists (VCs), with the investments touching a figure of $290 million in the second quarter ended September. "Though the global financial markets are feeling the liquidity crunch the VC funds are sitting on the cash of two billion dollar and looking for the right opportunities to invest," says Sumir Chadha, Managing Director Sequoia Capital and Co-founder and Chairman of Global India Venture Capital Association (GIVCA).
The investments were made across 49 deals with a growth of 36 percent in volumes and 15 percent in terms of value. Infact, the VC investments in the year till September account for 40 percent of all investments in the country comprising of 108 deals valued at $678 million. Most of them were early stage investments though there were some growth stage investments
However, the investment firms hoard certain amount of cash as for asset classes which are considered to be risky. Even there are doubts on the further increase in the investment rate as the economic turbulence increases. "There is positive side that investment opportunities are there in the lower valuations and the negative side is that you donot know when the overall situation will improve," said Chadha.