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Silicon Valley venture firm moves to India, finally -> Canaan opens office

We've heard a lot of hype about the Indian market. Yet few, if any, major Silicon Valley venture capital firms have actually opened an office there to invest in early-stage companies.

Canaan Partners, led by Deepak Kamra, becomes one of the first to do so (here is the announcement). Kamra, who invested early in companies like Match.com and Doubleclick, says a lot of firms have flown people in to visit India, but nobody is staying to open an office.

Deepak Kamra
Bessemer Venture Partners is there, but they are investing in later stage companies -- things like auto parts, real estate, hotels and discount brokerage firms. There are also local firms, like Westbridge. Silicon Valley's Sequoia Capital teamed up with Westbridge, but that isn't the same as Sequoia opening up its own office there, says Kamra.

Canaan has hired someone to work directly for Canaan there. That person is Alok Mittal, an established Indian entrepreneur and co-founder of JobsAhead.com, a leading job site in India. Mittal is also a founding member of Band of Angels India. Kamra, meanwhile, will be shuttling back and forth. There's lots of opportunity, particularly in internet and wireless, Kamra told us.

Alok Mittal
We checked out Mittal's site, and there he takes a little swipe at Sequoia's partnership with Westbridge. "What it really signals is their reluctance to come in and commit their most valuable resource time!" he writes on this post. "Effectively it means 'India is attractive enough to warrant my money, but not attractive enough to warrant my time.'" That commet may or may not be fair; we're just pointing out out, as an example of the jockeying going on by firms.

Canaan's office will be in New Delhi. That's as good as anywhere else, Kamra said, because there is no central "Silicon Valley" area in India.

Canaan made its first investment in India in 2000. There was a wave of investors in India during the late 1990s, and then everyone left after a bubble burst there too, said Kamra. Canaan has started investing in Israel, and India is Canaan's next step in a "global rollout," explains Kamra. He says China might be next.

He says there are 30 million Internet users in India, and that it has reached a stage of Internet usage where China was three years ago.

Kamra made us chuckle when he talked about the Indian venacular. A founder is called a " promoter" and a business concept is called a "scheme," he explained. So when someone introduces you as a promoter of a scheme, that's actually a good thing in India, he says.

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Yes I agree with the writer. I am running a blog called Southasianbiz which covers business related news but so far I havent seen any significant news about IT firms of Silicon Valley investing in India but there have been lots of outsourcing to India. I do not know why because India like China has a very attractive market and the country have well educated people highly skilled in English.

Razib on June 6, 2006 8:12 AM
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Razib I agree ! I closely track the Indian Tech Startup scene and I am an entreprenuer myself. There has been little news of Valley firms investing in Indian tech startup space.


Rajan on June 6, 2006 10:12 PM
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