The economic slowdown has India’s venture capital firms (VCs) focusing more on shepherding firms they have invested in, and going slow on chasing new deals.
“In the first half of the year, we will focus on existing businesses, and the second half depends on how the first half goes,” says Sandeep Murthy, partner, Kleiner, Perkins, Caufield and Byers, and Sherpalo Ventures.
Firms such as Helion Venture Partners and Draper Fisher Jurvetson, too, say they will do fewer deals.
2008 saw a reining in of valuations, on the rise since 2006, when venture and private equity (PE) investing returned to India in a big way, in the aftermath of a meltdown in the equities market starting September 2008.
PE and venture firms invested US$3.75 billion (Rs18,300 crore) in Indian firms in 2008 (until mid-December 2008), data from Thomson Reuters shows.
Valuations are expected to slip further in the coming months. “They have already come down by about 30-50% compared to 2007, we expect it to come down further by 10-15% in 2009,” says Chandrasekhar Kandasamy, managing director, ePlanet Ventures.
