Bangalore: Venture capital (VC) investor Clearstone Venture Partners, which has two offices in California and one in Mumbai, plans to invest $30-40 million (about Rs119-158 crore) in companies focussing on India’s consumer market in fiscal 2008.
Clearstone, which has $650 million in committed capital under management, has invested a total of $21 million in three Indian companies with partners since 2006. The company mainly looks to provide seed money to technology companies and business innovators. In the next 30 days, Clearstone is expected to announce an investment in a consumer company.
The VC firm also has two-three investments in the pipeline, which could be finalized as soon as in the next six months, says Rahul Khanna, director, Clearstone. Khanna, however, refused to divulge the name of the companies.
Clearstone, which plans to focus on India’s high-growth, consumer-driven market, says the sector is not overcrowded with investors, although some sluggishness is visible compared with 2001-03, when foreign investors flooded Indian markets.
“Investment business thrives on exits also,” says Khanna. “Although we are seeing some pulling out right now, there is no proof of a slowdown yet. There was a mad rush earlier to invest due to the flood of new investors. However, investments are happening at a much manageable rate right now. The market is still underplayed. It can take more investors.” Clearstone currently is investing in India from its global Clearstone Fund III.
Khanna says Clearstone will stay out of auction deals and would ideally like to invest in partnerships. Even with just three investments in the past one year, the firm says it is sticking to its game plan for Indian market.
“We are in no hurry to strike deals,” Khanna adds.
“We take our own time on deciding where we want to invest and what that investment would mean for the firm.”
Clearstone officials says it is open for investments in the range of $1-10 million. In terms of stakes, they could be from 26% to not more than 49% in terms of holdings.
Venture capital firms in the US have raised close to $2 billion for investment in India since January 2006, according to informal industry estimates.