VC Investment in India jumps 120% in Q2 2008: Bubble in making?


VC Investment in India jumps 120% in Q2 2008: Bubble in making?

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Advertising startups rule the VC world and ~37% of VC investment has gone in these startups.

Few interesting stats:

  • India attracted $238 million in venture investment with 17 deals closed in the second quarter, a 120% increase over the $108 million invested in 12 deals during the same period in 2007.
  • 7 second-round deals completed in the second quarter – total of $161 million.
  • 10 seed and first round deals were also completed during the quarter, accounting for nearly $77 million in investment
  • No later-stage deals were completed.

Sectoral split

  • Business & Financial Services industry, which includes the advertising/marketing sector, received the bulk of investment with $131 million invested in nine deals, records on both accounts.
  • Second in terms of investment was India’s Information Technology (IT) industry, which recorded three deals and $33 million worth of investment during the second quarter, a 55% decline from the $73 million invested in nine deals during the same period last year.[source]

What’er goes up, must come down – I am not sounding pessimistic, but am aware of few very well known startups that are shutting shop (will share as we get a green signal from founders/investors).

Are VCs following a herd mentality? Maybe (read this comment).

Is there a bubble in making? What’s your opinion?

Image via Wikipedia

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