Investors shifting focus from IT to BioTech, Logistics, Cleantech, Film Production and Education

Investments in the range of 8.5 Bn USD is expected to be vested in India from VCs and PEs in the next 5 years. The preferred sectors are: Life Sciences, Logistics, Cleantechnology, Film Production and Education, as per a joint study by ASSOCHAM and Deloitte.

Why this sudden interest in other sectors?

The regulatory regime is gradually disappearing in these sectors and hence are opening up for investments.

As per the report,

  • VCs are expected to invest in excess of USD 2 billion in India’s maritime infrastructure and logistics as it  strengthens cargo handling facilities to meet rising demand for exports and imports.
  • In 2007, investors committed USD 290 million in 11 cleantech investment deals compared to USD 140 million in 9 deals in 2006.  The momentum is expected to continue over the coming years given the government initiatives and policy focus on cleantech.  It is expected that PEs and VCs would be able to jointly garner an investment of USD 3.5 billion in cleantech areas in next few years,
  • The Indian film industry currently is worth 1.8 billion and is expected to grow @of over 25% and would reach a level of USD over 5 billion by 2011.  With the newly accorded status of industry and professionalism on film industry, it will emerge as new venue for VCs.  The ASSOCHAM expects USD 0.25 billion VCs investments in this industry in next five years.
  • Services from the domestic education sector is slated to create a lucrative opportunities for VCs.  A global private equity firm with USD 36 billion in assets is planning approximately USD 200 million investments in the Indian education sector by taking up strategic positions in companies offering e-learning, distant learning, vocational training and the like. [source]

It isn’t completely wrong to say that many Indian VCs whom I have personally spoken to are finding the Internet market less attractive – there is so much of action (i.e. market) elsewhere and maybe, lack of innovation is resulting in interest in other segments.

Recommended: CleanTech innovation in India.

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