Venture capitalists put $1.1 billion to work across 90 deals in the first quarter, against $362 million across 66 deals in the same quarter last year. “The heightened investment activity is a function of the opportunities and capital currently available in the market,“ said Vishal Gupta, managing partner, Bessemer Venture Partners. “The quality of companies and entrepreneurs is better than 5-6 years ago and investors have also seen some success in terms of exits.“ Bessemer is part of a growing tribe of early-stage investors that has sharpened its focus on technology startups in the past 12-18 months. Helion Venture Partners, SAIF Partners, Matrix Partners and Sequoia Capital, too, recently realigned their strategy to focus on technology startups.
“In the fourth fund, we decided to focus on seed deals in the middle of the fund cycle.In our new fund, we’re doing that from the beginning,“ said SAIF Partners’ Mukul Singhal, who leads earlystage investments for the firm. “We will invest in mobile, content and software, as the technology ecosystem has also become bigger.“
These firms initially started investing in India with a broader focus, balancing technology investments with non-technology bets in sec tors such as retail, healthcare and financial services.Until now, only a handful of investors IDG Ventures India, Accel Partners and Nexus Venture Partners have had a sharp focus on pure technology investments.Several of their early investments now count among India’s most valuable startups.These include ecommerce platforms Flipkart and Snapdeal and big data analytics company Mu Sigma.
“In the past couple of years, underlying macro factors such as growth of mobile internet have made technology investing viable. We’re at a tipping point and this will only increase,“ said Rishi Navani, managing partner at Matrix Partners India, which has lately been aggressively investing in seed-stage technology companies. Since the beginning of 2014, of the 10odd new deals that Matrix has announced, seven were in technology startups.
Sequoia Capital, SAIF Partners and Helion Venture Partners have been equally active lately in chasing earlystage technology deals. For instance, of Helion’s 10 investments in the past six months, eight were in technology firms. Recent bets include $5 million series-A rounds in social discovery platform Wooplr and dating app Trulymadly.
Investors expect interest in technology startups to sustain given the quantum of early-stage capital currently available.
Investors raised more than $1 billion in fresh capital last year and are on the road to raise another estimated $3 billion. While SAIF Partners and Accel Partners have already announced new funds, others such as Helion, Nexus and Kalaari Capital are on the road to raise fresh capital.