VC Investment in Q2 : Non-IT investments amount to 40% of the total deals

Venture capital funds invested $158 million through 26 deals in India during Q2, 2008 (April-June). All in all, Venture capital investments totaled $340 million across 51 deals in the first half of 2008 – source.

What’s really important to note is that the proportion of non-IT investments (alternative energy, media, retail and other consumer demand-led sectors) has reached ~40% (while in Q1, IT/ITES amounted to ~67% of investments).

About $ 5billion of new funds were announced in April, of which around

70% of the dedicated money is for real estate/infrastructure. Some of the other money is sector agnostic, like Azim Premji’s newly announced $1billion fund.

So, essentially many of the investments are not happening in IT/ITES sector and are being channeled to other sectors (retail tops the list).

Is this a healthy mix?

What’s your opinion?

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