Snigdha Sengupta

To illustrate the point, I’m breaking a rule to add a table to this column, just for this week. Ironically, what prompted me to take a look at those business cards was a casual conversation with a VC in Bangalore last Wednesday. “Bangalore is not so hot anymore. There are many more deals to be done in other cities," he said. So, let’s look at deals. Out of the 30-odd early-stage deals that have been closed in the last nine months, about 22 have been outside Bangalore.

Nothing wrong with that, except that if you really analyse the early-stage opportunity in India, it falls within four main categories—consumer Internet and mobile, consumer-driven businesses, IT-enabled outsourced services and technology products. The first two, as deals this year show (refer to the Mint Thomson Financial Deal Counter archives at, are driven by market demand and are therefore city-agnostic. Also, Mumbai, followed by New Delhi, remains the biggest consumer market in the country and, therefore, being close to the market makes sense. The fourth, technology products, has not really taken off and, is the one space that Bangalore could dominate.

But, nice as it is to usher in Mumbai as venture capital’s new home, it is impossible to ignore a rather ominous shadow—the 1999-2000 Internet boom era. At the time, every venture capital firm worth its name was based in Mumbai, and South Mumbai joints such as Geoffrey’s and Indigo were notorious for their mid-week VC bashes where deals, allegedly, got done by the minute. The party, as we all now know, ended with a three-year hangover. This round, fingers crossed, has to be different.

Snigdha Sengupta is Mint’s resident expert on private equity and venture capital.

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