The Venture Intelligence Blog

From New York Times : Partners at two prominent Silicon Valley venture capital firms deceived four of the five founders of a start-up company, withholding critical information and thereby cheating them out of tens of millions of dollars, according to a lawsuit. The suit, filed in Superior Court here last week, was brought on behalf of three of the five founders of Epinions, a consumer product review Web site founded in 1999 that quickly became one of the dot-com era's more celebrated start-ups. The suit named J. William Gurley of Benchmark Capital and John R. Johnston of August Capital, both original investors in Epinions and directors of the company, and an Epinions co-founder, Nirav N. Tolia. "It's rare for the founders of a company to sue their financial backers," said Paul T. Friedman, a partner at Morrison & Foerster in San Francisco. "Venture is a small world in which relationships are very important. Most people find a way to avoid disputes so

One of the first software products company in India, Ramco Systems, has been struggling to make a mark. While the company's ambitious ERP software Marshall failed, Ramco’s VirtualWorks, a platform for developing enterprise applications, seems to be doing better, says this Express Computers report. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

After IT, BPO, equity research and of course, editorial services , now it is the turn of advertising work to go offshore from the US to India. Bannerjee Partners has launched with its USP of a "Blended Outsourcing Model that offers unprecedented value to clients". The company will have offices in Mumbai and Bangalore. ʺWe believe (that our) blended outsourcing model will cause clients to question the value proposition of traditional agencies,ʺ Dave Banerjee, Founder, says in the company's launch press release. ʺWith creative and production teams based in India and supported by Internet-age efficiencies, Banerjee & Partners offers award-worthy advertising at costs that are 40 to 60 percent less than industry averages," the release adds. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

A key highlight of 2004 was the emergence of Singapore-based contract electronics manufacturer Flextronics as an active investor in – and acquirer of - Indian technology companies. The company moved swiftly to invest in most of the leading communications software companies in the country: it acquired FutureSoft and Deccanet Designs (both Intel Capital portfolio companies) and invested $226 million to acquire the 55% stake held by News Corp. in publicly-listed Hughes Software Systems. As part of the company’s plans to make India its global center for technology products design, Flextronics also led a $10 million investment in chip design firm inSilica and acquired multimedia technology firm Emuzed.

Thanks to a strong interest among global staffing services firms to enter India, three HR and recruitment services companies provided exit routes to their private equity investors during 2004: Ma Foi Management Consultants (acquired by Dutch staffing services firm Vedior), JobsAhead.com (by Monster.com) and PeopleOne Consulting (Adecco). On a related note, here's a recent Businessworld cover story on the rise and rise of temperory staffing services. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

The Venture Intelligence India Roundup Annual 2004 report will be released next week. Here are a few highlights from the report: Venture Capital and Private Equity firms invested about US$ 1.1 billion* in 66 India-based companies during 2004. The amount invested was significantly higher compared to the $507 million invested during 2003. Warburg Pincus’ $149 million investment in optical storage media maker Moser Baer was the largest VC / PE investment during year Investments in Business Process Outsourcing declines Late stage and publicly-listed companies corner majority of the investment pie ICICI Ventures emerges as the most active VC Companies based in South India corner over 50% of investments Mumbai threatens Bangalore’s lead as top destination for VC investments VC and PE firms obtained exit routes for their investments in as many as 30 companies during 2004 Six venture-backed companies pulled off successful IPOs during t

Businessworld magazine recently published a country report on Singapore including the renewed interest among Singaporean funds like Temasek and GIC as well as Singaporean companies like Ascendas (best known for its IT park in Bangalore), Singtel and Singapore Ports. Extracts: The Government Investment Corporation (GIC) of Singapore - the one housed in Capital Towers - manages a figure that inspires awe in Singapore. "Upwards of $100 billion: that's the number associated with GIC," says the chief investment manager of a large US-based private equity fund operating from Singapore. Temasek, whose offices are in the Atrium, manages a portfolio of $90 billion. GIC is secretive - no published account of its finances exists. Temasek, too, was opaque till a while ago, but this October, it published its finances for the first time, causing a sensation in the region. For the record, Temasek, which was created in 1974, has delivered a return of 16 per cent on an annua

Businessworld magazine has declared 2004 as a "Champagne year" for investment bankers thanks to the large number of IPOs and cross-border M&A activity. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

The $15 million third round funding raised by Bangalore-based telecom equipment firm Tejas Network's will be the last round before the company goes public or gets acquired, BusinessWeek's newly launched VC blog reports quoting Carl Stjernfeldt, partner at the round's lead investor Battery Ventures. Other investors in Tejas include Intel Capital, IL&FS VC, and Sycamore Networks founder Desh Deshpande. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

From a Businessweek interview with DCM-Doll Capital Management's David Chao Q: Which sectors look attractive in China? A: There are a lot of semiconductor-design companies that work on next-generation chips. Another area is media services, as the overall advertising industry grows in China. We also look at next-generation Internet infrastructure plays. And the last category would be mobile platforms, like next-generation game companies or mobile-services companies. Q: Is a VC bubble forming in China? A: On the late-stage side of the fence, there's definitely a bubble. Things are being overpriced. It's natural. You have foreign investors going into China. They probably don't have the wherewithal to do the early-stage, hands-on growing of a company. So they end up investing in late stage because they have to do less of that. When they narrow themselves to that, and there's so much money chasing that, naturally prices are going to go up. With US VC funds

In an interesting experiment, Venky Ganesan, a Managing Director with Globespan Capital, and Narasimha Chari, Co-founder and Chief Architect at Tropos Networks, have come together to create a blog, VenChar , sub-titled "Ideas, analysis and opinions on technology". A sample extract below from "Ven": I have had a chance in the last few months to talk to quite a few senior software execs from a variety of software application companies. A constant theme appears: * The software business has changed irrevocably and has matured * The glory days of growth are over * Technology does not matter; its all about maintenance revenues and consolidation * No white space remains in the software landscape Hearing all their lamentations reminds me of an episode from my salad days when I had a real job. I was at Microsoft in the mid 90's and was lucky enough to be one of a few microsofties invited to have dinner with Bill Gates and Mike Maples (the

I'm quite proud about spotting and writing one of the first articles (way back in early September 2004) on the trend of VCs taking to blogging. I wrote about it here at the Venture Intelligence India blog as well at Always-on Network . My article was followed up in the San Jose Mercury News on September 21, 2004. And now, Venture Capital Journal has decided that the trend is important enough to make it as their cover story for the first issue of 2005. "In the not-too-distant future most venture capital firms will have at least one blog. They will be as common as websites, but far more useful. Venture capital, when all is said and done, is a relationship business. And blogs, by their interactive nature, foster relationships and bring together like-minded people," writes Lawrence Aragon, VCJ's Editor in his leader. "If an entrepreneur has two similar term sheets in front of him, wouldn't he be more attracted to the one from the VC who has shown (through