The Venture Intelligence Blog

At the recent Venture Intelligence APEX PE-VC Summit, Bharati Jacob, Managing Partner, Seedfund shared how the closure of Seedfund's second fund got set back by more than two years because the foreign investors who were about to invest in the fund, got spooked by the Mumbai terrorist attacks of 2008. One American LP (Limited Partner or investor in PE/VC funds) pulled out saying  "India and Pakistan are eyeball to eyeball and could go to war any minute and I cannot invest in India any more." Their pulling out caused a herd mentality among the other investors, causing almost all the LPs to pull out. Despite India's economy picking up, she recounts " we did not have LPs who understood local conditions... overseas LPs were looking at it through their own tinted lens". "Things have not changed too much now - from being hyphenated with Pakistan, we are now hyphenated with China," she added This episode underlines the need for a deeper pool ...

Venture Capital firms invested $242 million over 85 deals in India during the three months ending Mar 2016, data from the Venture Intelligence VC Deals Database shows. The investment activity by volume during Q1’16 is 32% lower compared to the same period in 2015 (which had witnessed 125 investments worth $471 million). The activity level was also 13% lower to the immediate previous quarter (which had witnessed 98 deals worth $347 million). Note: As VC type investments cap out at $20 million per round under Venture Intelligence definitions, follow on investments raised by companies like BigBasket, CarTrade, ShopClues, Byju’s Classes, etc. are not included in this report. The larger Growth Stage investments in Q1’16 included the $20 million Series D investment in B2B Group Buying site Power2Sme led by Nandan Nilekani (along with existing investors Kalaari Capital, Accel India and Inventus Capital) and the $13 million third round investment in baby products e-commerce site Hopscot...

In the context of Azim Premji of Wipro and N.R. Narayananayamurthy of Infosys carving out funds for VC-type investments from their family offices, here is an extract from an article in Institutional Investor on how Family Offices in the US are now preferring to directly invest in private companies and the benefits of such an approach. The tectonic shifts in the venture economy are placing a heavy premium on new investment. The drought in funds, combined with the need among family offices for uncorrelated and outsized returns, is creating a perfect landscape for those with the ability to implement a solid venture strategy. ...Having suffered market losses in 2008 and early 2009 from investments in supposedly safer asset classes, family offices are focusing on venture capital and private equity. Rather than rely on external managers, family offices are now investing themselves, rapidly becoming a critical source of new venture capital. This is not a new idea. The great founding industr...