15 December 2011

Bangalore: The Heart of VCs

“There is no surprise in saying that Bangalore is the ‘Heart of VCs’. The bulk of VC investment happens in technology, and Bangalore is the Heart of Technology startups by far,” says Samir Kumar, Managing Director, Inventus Capital. The VC invested in 15 companies to date, half of which are in U.S., and the bulk of the other half are in Bangalore.
Bangalore: The Heart of VCs

2011 witnessed a bunch of Bangalore based startups raising hefty amount of fund convincing the VCs. Ashok Soota founded IT solutions and services firm, Happiest Minds, raising $45 million in series A investment from Canaan Partners and Intel Capital, Naveen Tewari  founded InMobi, raising $200 million from Japan-based Softbank, redBus raising $6 million in series C from Helion Venture Partners, Inventus Capital, and Seedfund, TELiBrahma raising $5 million from Intel Capital, Inventus Capital Partners, and Ojas Venture Partners and many more.

So, can Bangalore be crowned the ‘King’ when it comes to investments by venture capitalists in India? Gautam Sinha, Partner, MyFirstCheque, says, “From the past experience, one would have thought that Bangalore would be the place, but that doesn’t seem to be the case from what I have seen in the last 10 months. The activity seems to be more spread out, which is a good sign, but maybe Bangalore may have a very small edge.”

Bangalore has always had a legacy advantage. Moreover, the big wave of venture capital happened when the Silicon Valley was booming, and almost 60 funds, directly and indirectly had a presence in Bangalore. Even the first venture capital fund was started by Indian institutions, way back in 1988 and was headquartered in Bangalore. For sustaining entrepreneurship, we need skilled technical talent, which have been fostered by lot of groups like OCC, Mobile Monday, Tie, BarCamp and lot more. Founder of Bangalore based Iviz, who shifted their base from Kolkata says, “The main reason we shifted our base was that there was an easy access to senior and junior level talent pool.”

So does that mean that Bangalore has no competitor? One might not believe so. “The ‘Heart of VCs’ is still Bangalore. However we are seeing a lot of deal flow from Gurgaon in the last year or so. Most of the investments we have made in the last year have been in companies based in Gurgaon,” says Sasha Mirchandani, Managing Partner, Kae Capital and Co-Founder, Mumbai Angels.

It is the tight-knit community of entrepreneurs, immensely-talented workforce, infrastructure, and international exposure that has made Bangalore, ‘The Silicon Valley of India’, the ‘Heart of VCs.’