Canaan Partners, SVB Invest $3.1 Million In Remote Computer Support Company iYogi

Canaan Partners, along with SVB Financial Group, has invested $3.1 million in a Delhi-based computer support startup iYogi. The company provides live computer support on the phone and via remote access for home and small businesses.

The investment will be used to expand iYogi’s service offerings, sales and marketing programs, and to enhance delivery operations in India, a release said. Alok Mittal, Canaan’s Executive Director in India, will join the board of iYogi. This is the second investment in India for Canaan. It had earlier invested $8.5 million in BharatMatrimony.com alongwith Yahoo India.

Canaan is focused on early stage deals or Series A investments in India. iYogi is headquartered in Gurgaon, near Delhi, and provides computer support via phone and remote access for home and small business users globally. It charges $9.99 for a single incident and $89.99 for an annual subscription or unlimited incidents.

--Canaan Partners is close to making its second investment in India after it set up shop in the country last year. The Silicon Valley venture fund has zeroed in on a Delhi-based start-up that provides remote desktop services for US and UK customers. The firm may invest about $2 million-$5 million. A Business Standard report says the firm has invested in an unnamed company. When VC Circle contacted Alok Mittal, Executive Director, Canaan Partners India, he confirmed the development but the deal was yet to be closed. He did not reveal the name of the company or other details. Canaan, along with Yahoo, had last year invested $8.65 million in BharatMatrimony Group.

--Every telecom company is or have demerged their tower businesses, and they are offloading stake to private equity funds. Tata Teleservices (TTSL) is reportedly in talks with Singapore’s Temasek Holdings, besides other private equity players to sell stake. It may sell up to 20 per cent stake in the subsidiary which will hold all wireless towers and other related telecom infrastructure. Temasek already owns under 10 per cent in TTSL. Bharti Airtel and Reliance Communications have already hived off their tower businesses, but are yet to sell stakes.

--Mobien Technologies, a provider of enterprise mobility solutions for last mile connectivity, is raising venture capital. The company, founded in 2003 by Logitech Systems India, recently launched iNotify, a mobile solution that integrates an organisation's ERP systems with the mobile devices used by field staff. The company has clients like ITC, Nagarjuna Fertilizers and Dr Reddy's. It has recorded revenues of $6,00,000 in FY 2006-07. (Via Business Standard)

Citi, Macquarie And Three Other Foreign Firms In Race For Stake In UTI Securities

A big chunk of stake in broking firm UTI Securities is up for sale. The seller is Securities Trading Corporation of India (STCI), which holds 100 per cent in the company. STCI has put 49 per cent on the block.

There is interest from several foreign broking houses in this semi-government undertaking. Citigroup, Macquarie Bank, Standard Chartered, Societe Generale and Kuwait-based Global Investment House are believed to be in the race, according to a report in Business Standard.

In April 2006, STCI bought 100 per cent stake in UTI Securities for Rs 265 crore last year from Specified Undertaking of UTI (SUUTI), which was the administrator. According to this deal, STCI has a minimum lock-in of three years for 51 per cent stake, which ends in 2008. It can however, hawk the rest any time. Interestingly, STCI prefers a foreign player as a strategic partner. UTI Securities started as an institutional brokerage firm. Now it has moved to retail broking too. It also has an online broking division - Usectrade.com.

Broking business has been a very active sector from the M&A and private equity point of view. Recently, BNP Paribas bought 33.35 per cent stake in Geojit Financial Services for Rs 207 crore. E*Trade and SAIF Partners are investors in IL&FS Investsmart. Citigroup Venture Capital International recently acquired 19.9 per cent stake in Mumbai-based Anand Rathi Securities. General Atlantic, Intel Capital and HSBC Private Equity are investors in Sharekhan. Motilal Oswal Financial Services, which had sold 9.48 per cent stake to New Vernon Private Equity Ltd and Bessemer Venture Partners last year, is going in for an IPO now.

Google Takes An LP Approach In India; Invests In Erasmic And Seedfund

Google is taking an LP approach in India as to investing. The Mountain View-based search giant has invested in two early stage or seed stage funds - Bangalore-based Erasmic Venture Fund and Mumbai-based Seedfund. The amount of investment in both firms is undisclosed.

"While the rush of large amounts of venture capital into India is well-documented, very little of this trickles down to small firms - the early-stage startups. Our effort is to build this gap by investing in these funds,"

said Samir Sood, head (corporate development - South Asia), Google.

Apparently, India is the first country where Google has made a limited partner investment in early stage funds. These funds would essentially look at product innovations in consumer, Internet and mobile services.

New Enterprise Associates Appoints Ben Mathias As VP Of Indian Operations; To Invest $200 Million In India

US venture capital firm New Enterprise Associates has announced that it will invest $200 million in Indian technology sector. The fund has appointed Ben Mathias as Vice President of the Indian operations - under the entity New Enterprise Associates (India) Pvt. Ltd. Mathias will work closely with NEA’s US-based technology team. NEA has $8.5 billion in committed capital across 13 funds.

“We have been selectively investing in India for many years and believe the country offers an attractive environment for venture investing,”

said Peter Barris, NEA Managing General Partner.

The fund has investments in Sasken Communications, Telsima, Nevis Networks, Protostar, InSilica and GlobalLogic. NEA also has 20 per cent stake in NEA-IndoUS Ventures, an early venture capital fund started by Vinod Dham and Vani Kola. NEA will invest in early-stage IT investments indirectly through NEA-IndoUS Ventures. NEA’s direct investments will be primarily in mid to late-stage opportunities.

“NEA’s focus in India will be on expanding its investment portfolio, while making returns on our initial investments. We look forward to working with India’s best and brightest entrepreneurs in telecom, media, alternative energy, technology-enabled services and infrastructure,”

said Krishna “Kittu” Kolluri, General Partner.

“Our US-based team which also includes Mark Perry and Ravi Viswanathan, will be
consulting with Ben Mathias (head of Indian ops) to identify opportunities..."

Chrys Capital Sells Global Vantedge To Essar Group's Aegis For $22.5 Mn

It's official now. The Essar Group-owned Aegis has acquired BPO firm Global Vantedge for Rs 100 crore or $22.5 million. Global Vantedge, a 75 per cent of which is owned by private equity fund Chrys Capital, is a US-based credit and receivable management BPO.

Set up in 2001, Global Vantedge employs 1,400 people at in Gurgaon, San Jose and Costa Rica. It has operations in the banking, telecom and automobile verticals. The acquisition is the fourth by Aegis in the past one year. Global Vantedge will add over $25 million in revenues to the BPO business of the group. Aegis is scouting for more buys in the US.

It had earlier acquired Customer First and Orion in India and Technion in the US. In November 2003, Essar and Deutsche Bank had bought 80 per cent stake in Texas-based Aegis for $28 million. Later, the Essar group increased its stake in the company. Last year, Essar delisted Aegis Communications Group (ACG) from over-the-counter bulletin board (OTC BB) of Nasdaq at an equity valuation of $57.4 million.

GVFL Makes Seed Investment Of Rs 8 Million In RapidRadio

Venture capital fund GVFL Ltd has made a seed investment of Rs 8 million ($180,000) in RapidRadio Solutions Pvt. Ltd, a technology start-up spun off from the NirmaLabs incubator program. RapidRadio, set up in 2005, works in the area of RFID (Radio Frequency iIdentification) technology.

Rapid Radio is the sixth investment from the Rs 270 million Gujarat IT Fund of GVFL. Its previous investments include Net4Nuts, Ecube, Icenet, Anupam Globalsoft and Convergelabs from the fund. Rapidradio is GVFL’s first investment in a start-up from an academic incubator program.

“The RapidRadio investment is a new milestone in our endeavor to provide critical seed stage and early stage funding to innovative start-ups that are poised to take knowledge based test-marketed ideas into commercial production. We are now stepping forward into campus incubation programmes to identify and nurture promising ideas and entrepreneurs,”

said Vishnu Varshney, CEO of GVFL Ltd.

Dhaval Kotecha is the CEO of RapidRadio , a friend of mine! Congratz Bro!

Global Outsourcing to Become Main Form of IT Delivery by ‘12 – Forrester

According to a research conducted by Forrester, outsourcing will become main form of IT delivery by 2012. In addition, Indian companies are likely to overshadow the multinational firms in the application outsourcing domain. Among the key findings, more Americans are likely to offshore their work in the near future.

The Indian outsourcing firms such as TCS, Wipro, and Infosys had posted an increase in revenues in the range of about 40 percent to 50 percent. According to another research firm, Technology Partners International, the Indian vendors own just 6 percent of the global outsourcing market in 2006. In addition, the US companies are only spending about 1.9 percent of their outsourcing budgets on offshore services.

However, at present, the Indian firms are gaining with global firms relying on third-party vendors to optimize and streamline their businesses. The application outsourcing services have materialized as a highly strategic business. It has also become difficult to sell various IT and BPO services, which are prompting a huge investment.

TOP 10 VC Deal Makers

1. Michael Moritz, Sequoia Capital
2. John Doerr, Kleiner Perkins
3. Andreas Bechtolsheim, Sun Microsystems
4. Ram Shriram, Sherpalo Ventures
5. David Cheriton, Stanford Univ.
6. Ron Conway, Angel Investors
7. Michael Grimes, Morgan Stanley
8. Larry Sonsini, Wilson Sonsini
9. Jay Hoag, Technology Crossover Ventures
10. Thomas Ng, Granite Global Ventures

Info from VentureBeat

Venture capitalists slowing down?

Venture capital investment into U.S. companies slowed markedly in fourth quarter of last year, to the slowest pace in two years.

That drop-off wasn’t enough to knock 2006 from its status as most robust year since 2001, however — and it’s too early too tell whether the slow-down will continue into this year.For all of 2006, investors backed 2,454 companies, slightly ahead of 2005’s level. Total investment was $25.75 billion, an 8 percent increase over the preceding year, according to the quarterly survey by Ernst & Young and Dow Jones VentureOne.

The surprise is the fourth quarter, when VCs backed 561 deals and invest $5.82 billion, drops of 13 percent and 2 percent, respectively, from the fourth quarter of 2005.
This comes at the same time venture capital firms slowed their own fund-raising from their investors to the slowest pace in three years, according to Thomson Financial data released last week.

Trends in Silicon Valley reflected the slowdown seen in the rest of the nation. VCs invested $1.94 billion in local companies, down from $2.12 billion the same quarter of 2005.
See diagram below, which suggests the interactive Web companies (dubbed Web 2.0) were among the few sectors to grab more money in the fourth quarter compared to the third quarter. The classifications aren’t perfect, but see “consumer/business services” and “media/content”, for example.

But if you stand back, and look at 2006 year as a whole, investments increased across each of the three main industries tracked

(a) healthcare,

(b) IT and

(c) consumer and business products and services, so this a broad recovery.

Within IT, though investments fell in the sub-category of chips.

The clear winner was alternative energy, where investments boomed 190 percent, compared to the year before.

Highlights:

–Healthcare in 2006 — 628 companies were invested in; 5% increase from 2005

–11.3% drop in communication & networking in 2006

–14% increase in electronics & computing

–27.5% increase in information systems

–6.6% drop in semiconductors

–1.8% increase in software

–Alternative Energy in 2006 - $537.6 million in 41 companies; 190% increase from 2005

The biggest deals are listed in a table at bottom.

Meanwhile, data suggests that less money can sometimes be better, according to the number-crunchers at Bridgescale, a new Silicon Valley venture firm (see Venture Beat story here). The firm used VentureOne statistics and other sources to track IPOs and mergers and acquistions. Companies funded by angels initially take in three rounds of venture capital, on average, instead of four, they found. This suggests these angel-backed companies are more efficient. Indeed, these angel-backed companies ended up taking $15 million less money from investors than other companies did before their exits — or $50 million, versus $65 million.

Finally, these companies accounted for $700 million in total investments, but led to $10 billion in exit value, a 15-fold return, Bridgescale found. That compares to $2 billion invested, and a $13 billion exit value for other companies, or a 6-fold return.

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