2010 rings in a Cheerful investment Year in India

By Eureka Bharali, SiliconIndia
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Bangalore: Venture capitalists in the U.S. widely expect their industry to contract while those in emerging markets, including China, India and Brazil, expect to see their ecosystem expand over the next five years, according to the 2010 Global Venture Capital Survey by Deloitte and the National Venture Capital Association. "The investment trend is on the uptrend with new business models being backed. Therefore the VCs seem to be coming out of their comfort zones of emulating the business successes in the U.S. and instead placing bets on Indian model," says Ravi Narayan, Founder and Managing Director of Mentor Square.

85 percent of respondents in India expect the number of venture capital firms to increase in their country. At this junction, compared to the recessionary period when purse strings were tightly held, the 2010 recovery heralds an upward curve in the Indian VC market.

$600 Million VC investment

The VC investment in 2010 in total went upto $600 million, though it is yet to touch the pre-recession levels when investments were close to $800 million. Mostly, it was education and healthcare which saw the maximum investments as neither of the sectors were much impacted by recession. Infact, recently, even e-commerce firms saw more investments.

Ritesh Banglani of Helion Ventures see the funding rise due to the increase in the quality of potential teams. "Since, 2008 there was a dip in people stepping out of their cushioned jobs and venture into entrepreneurship. However, today, the scene is different. The VCs could once again see potential team members including senior corporates and serial entrepreneurs," he says.

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