India VC investment down 30% last year

Venture capital firms invested less in India during 2012, but continued to favour IT businesses.

In India, venture capital firms invested $762 million across 206 deals during 2012, according to a report by data provider Venture Intelligence. The amount was a 30 percent decline from the $1.1 billion invested across 222 deals during 2011, indicating a preference for smaller ticket deals, the report said. 

Information technology and IT-enabled services continued to be the most popular sector for venture capital investment, attracting 65 percent of all investments made last year. The $381 million invested in IT and ITES businesses represented a significant 32 percent decline from the value of those investments made during 2011.

The healthcare and life sciences industry emerged as the second favorite destination for venture capital investors, attracting 18 investments worth $98 million during the year, with the education businesses sector attracting 14 investments worth $53 million.

Blume Ventures was the most active venture capital investor during 2012 with 23 investments, followed by Accel India and Sequoia Capital India with 12 investments each.

The amount private equity firms invested in India during 2012 also dropped 15 percent year-on-year, with Q4 figures especially low, according to Venture Intelligence data. 

Private equity firms invested $8.8 billion over 406 deals in India during the whole of 2012, a 15 percent decrease from the $10.4 billion invested across 483 deals in the previous year.