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VC Activity in 2009 – Retail Boom vs. Internet Slump

Entrepreneurial NarayanMurthy (NRN)

2009 was a milestone year for Indian VC community – most of them decided to stay away from investing in Internet market and did a lip service to investing in ‘pure technology’ firms. Majority of investments happened in areas that matter, i.e. healthcare and offline businesses, while mobile did get a boost with investment in VAS as well as rich media platform startups.

Here are a few significant investment that happened in key industries in 2009:

Entrepreneurial NarayanMurthy (NRN)
Entrepreneurial NarayanMurthy (NRN)

Investment in Healthcare

Top 5 deals in healthcare :

Investment in Offline Businesses

Rural India and offline setups are growth sectors and a good number of investments happened in these industries in 2009:

Retail Businesses

Mobile Funding

VAS, Mobile TV were the pick of the season and surprisingly, no major investment happened in SMS based services.

Corp investments include Microsoft 20% stake in Affle and Rediff’s investment in Imere (LBS startup), while OnMobile raised $15mn from NVP India.

Other significant investment in Mobile space include:

Funding in Internet Businesses

Nothing much to talk about. Very few investments happened in Internet businesses and the businesses that received VC funding have a strong offline support component to the business.

Does that speak of something? Viability of pure play Internet business in India?

NRN

If there was one significant milestone India Inc achieved in 2009, it was NRN’s announcement of Catamaran fund. The fund will invest in healthcare, retail, technology and he is joined by his wife who sold stocks worth $92 mn, taking the fund corpus to $129mn.

What’s your take on VC investment in 2009? What trend do you foresee for 2010?

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