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VCs seal $21 million deal with two Internet firms

VCs seal $21 million deal with two Internet firms
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First Published: Wed, Jan 19 2011. 10 28 PM IST
Updated: Wed, Jan 19 2011. 10 28 PM IST
Bangalore/Mumbai: Two venture capital (VC) deals worth a total $21 million (Rs95.34 crore) in Internet companies were announced on Wednesday.
Online ad network platform Komli Media Pvt. Ltd said it has raised $15 million from Norwest Venture Partners (NVP) and existing investors.
In the second deal, Helion Venture Partners and two others invested $6 million in New Delhi-based e-commerce portal LetsBuy.com, run by Etree Marketing Pvt. Ltd.
The Komli deal was led by NVP, with existing investors Draper Fisher Jurvetson India (DFJ), Helion and Nexus Venture Partners participating.
Founded in 2006, the Mumbai-based Komli offers an advertising network platform and an audience measurement platform. Clients for its ad network include social networking site Facebook and travel website Expedia Inc.
Komli will use the funds to significantly invest in both its platforms, said Prashant Mehta, chief operating officer.
“As Komli Media expands its core operations in the fast-growing Asia-Pacific markets with a digital market size of more than $3 billion, we plan to leverage this funding to double our investment in our key products and platforms, as well as scale our organization across sales and marketing,” he said. It will also use the money to expand further into South-East Asia and West Asia.
Mehta declined to disclose the stake sold to VC firms.
In July, Komli raised $6 million from Nexus, Helion and DFJ. It raised $7 million in January 2008 in its first round of funding.
Niren Shah, managing director, Norwest Venture Partners India, said while the online advertising market accounts for less than 5% of the overall ad market, increasing investments by advertisers in the space is a definite opportunity.
“We understand this market well. We have 5-6 investments globally in the space. Komli is tech-focused and that is what we like about it. The investments will go into sales and technology and that is what is required to win in this market,” he said over the phone from Mumbai.
As for LetsBuy.com, the New Delhi-based e-commerce portal raised $6 million from Helion, Accel Partners and Tiger Global. The one-and-half year old start-up is an online retailer of consumer electronics, and communications and computer goods.
“The company is going after consumer electronic goods in the IT space, which not only has a large market but has been globally proven to be a successful model. Also, their traction in tier 2 and 3 cities is very encouraging,” said Kanwaljit Singh, managing director, Helion Venture Partners.
Hitesh Dhingra, founder and chief executive of LetsBuy.com said the company will use the funds to strengthen customer service, technology and supply chain processes.
Mohit Agarwal, an associate with investment bank Equirus Capital (P) Ltd, said increasing interest in the online space is more of a function of timing and maturity of the sector in the country. “Primarily, the online space has shown immense scalability with companies like Flipkart (an online book store) doing immensely well,” he said. Deepak Srinath, co-founder of Bangalore-based investment bank Viedea Capital Advisors Pvt. Ltd, said the potential of India’s Internet business hit home with MakeMyTrip (India) Pvt. Ltd’s share sale in the US in August.
“With the $1 billion IPO of MakeMyTrip, there is a belief that five more such stories can be created in India,” he said. “Investors are thus waking up.”
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First Published: Wed, Jan 19 2011. 10 28 PM IST