Bangalore: Venture capital firm Clearstone Venture Partners’ India-focused investment team plans to expand its 2008 portfolio of sectors for investments in the country.
The fund, which mainly focuses on providing seed money to technology firms and business innovators, will now look at investment opportunities in wireless content spaces, financial services, logistics, entertainment, online advertising and content firms that are “lifestyle-driven”, said Sumant Mandal, managing director.
Clearstone has $650 million (Rs2,619.5 crore) in committed capital under management, and has invested at least $27 million in four Indian firms with partners since 2006. The firm is currently considering more than six deals, which would be announced in the next five-six months, said Mandal, who would only say they are all so-called syndicated deals. “Our diversification from the kind of companies we have been investing in is clear from our latest investment,” he said. In January, Clearstone co-invested Rs25 crore in Elbee Express Pvt. Ltd, an express delivery firm.
Prior to that, Clearstone had invested about $5 million in Games2win India Pvt. Ltd, along with SVB Financial Group. Games2win is an online gaming marketplace. It had also invested $ 8.5 million in Digibee Microsystems, a mobile handset designing firm, along with Sidbi Venture Capital Ltd. Clearstone’s first invest in India was in June 2006, along with the State Bank of India. They had invested $7.5 million in BillDesk, a payments service provider.
Clearstone, which invests in the range of $1-10 million, would continue with its investment peg. Mandal says new types of investments would be seen this year in general, with the focus being diversified to sectors such as education, energy, and entertainment.
“I believe a shake-out will happen in 2008 and only 5-10 real early-stage venture capital (VC)?funds?would?survive in the longer run,” he said. “Liquidity tightening makes people less adventurous. Secondly, though India remains a place for investment, it’s not a market for quick money any more.”
There are around 20-25 early-stage VC firms as well as seed funds in India, including both domestic as well as global funds. The most prominent early-stage VC firms include Helion Venture Partners, Sequoia Capital India and IDG Ventures India. Early-stage VC funds typically invest between $1 million and $5 million.
As per a Dow Jones VentureSource report, venture capitalists had invested around $928 million in 80 deals in India last year, including 48% in IT firms.