Why did Lightspeed take AskLaila bet?

Ever since I heard the news of LightSpeed led $10 million investment in AskLaila, I have been scratching my head and searching for answers. For starters, AskLaila is a purely India focused local yellowpage website with an added layer of basic value added services such as user reviews.

How much ever I may wish to laugh away this investment as one of the 90% VC investments that go down the drain, the reality is that nobody, especially hardened breed known as venture capitalist, invests $10million without a clear glimpse of potential high payoff.

Here is a clue, when we look at Indian Market there are two clear realities that strike an aware mind

1. One one hand, we see a growing economy, that clearly has a potential to be one of the largest in the world in next couple of decades. With a vibrant economy comes phenomenal consumption demand that can raise many billion dollar companies in basic customer facing services alone.

2. On the other hand, we have an utterly underdeveloped consumer services infrastructure. A casual visitor from western world can clearly appreciate that India lacks basic services that everybody in the West takes for granted.

Now you start to see some method in the investment madness across sectors in India. We are talking about basic consumer facing infrastructure that can deliver reliable services day in and day out, which does not exist in India today.

When it comes to basic infrastructure, It may take a lot of investment & efforts to build something that works, but successful players will have the last laugh.

Three cheers for hundreds of AskLailas, Lightspeed Ventures, entrepreneurs and investors who have decided to take a plunge.

--
Writer is founder of youmagix.com and can be reached at subodhv AT gmail.com

India Startups Ecosystem Update 19-June, 2007

RouteGuru provides Directions Indian Way

Sparksfly blog introduces RouteGuru an interesting startup that provides driving directions the Indian Way. According to RouteGure website, technology is from Navolve Technologies and ackend mapping data is provided by Eicher Goodearth Ltd.

Helion Venture Partners' Ashish Gupta on Venture Investing and more...

Ashish Gupta, Managing Partner of Helion Venture Partners, talks about entrepreneurship, investing and entrepreneurs.

Helion is a $140 million india focused fund and it has recently invested in Komli, Anantara Solutions and Amba Research.

The Hindu publishes this interesting and informative dialogue with an entrepreneur turned VC, checkout...

Go Global - ISB Mantra for Indian SMEs

An interesting point of view from Jerry George, LBS professor and visiting faculty at ISB, who was at the SME program organized by ISB for SME business to help them go global.

Thinking BIG is a pre-requisite for high potential enterprises and I resonate with Jerry that Indian entrepreneurs do suffer from small thinking syndrome. Even after thinking hard, I do not recall a single encounter with an entrepreneur in India who tells me that he is working on a "Billion Dollar" idea.

Helping SMEs to think global is a welcome step, well done ISB!

ISGN receives $25 million Mezzanine Funding

New Enterprise Associates (NEA) and an affiliate NEA-IndoUS Ventures Fund have invested $25 million in ISGN, a software services player in mortgage sector.

This is surprising considering that software services, as a space, has become unattractive due to various macroeconomic factors. This deal may indicate one of the following

1. From investors' side, difficulty of finding good deals. Basically, too much money running after a few good plays
2. ISGN has agreed to a low valuation
3. NEA considers mortgage segment an exception in software services game

India Entrepreneurial Ecosystem Update June-8, 2007

Via receives $5 million in venture funding from NEA-IndoUS Ventures
Via (earlier Flight Raja) is an interesting venture that combines power of online efficiencies and reach of offline channels to reach a broader audience. Via has a plan to become leader in travel and transportation game including air travel, bus transport and leisure market segment.

NEA-Indo US ventures is a venture capital firm co-founded by K. Dham and K ola.

AMAI Web 2.0 Conference
AMAI’s is organizing a conference on Web 2.0, on 22nd June in Mumbai. Good opportunity to network with people with ideas and capital. Follow this link for more details

Proto.in Agenda
Proto.in has come up with initial agenda for the event. You can also submit your comments on their blog. Your suggestions may find their place in the final list.

India Opportunity Seminar
Chilli, a platform for entrepreneurial business stakeholders is organizing “New India, new economy: the myths, realities and opportunities” seminar. This seminar takes place in Bath on the 21st June at the Innovation Centre

Clean Tech India Private Equity Investment

Though venture capital has almost been inactive in clean tech space, private equity players invested $250million in year 2006 in India. Take a look at a related news item

Deal Syndication and Indian Venture Capital Industry

Venture cap firms use deal syndication -- a VC jargon for joint investment -- as a risk mitigation strategy while investing in early stage startups. Getting another VC firm to invest in early stage idea provides a strong second validation.

In India, deal sizes in early stage ventures have been small and venture equity firms have gone solo in most of the venture equity deals. Its high time firms look at syndication to get a strong second opinion about the idea they want to engage in.

Is Joint investment in iYogi by Canaan Partners & SVB Financial ($3.1M) an early sign of similar trend in Indian space?

New Venture Ecosystem India Update - May 3, 2007

Foreign Investment in Pref Shares now on par with Debt

According to a Ministry of Finance circular, government will now treat foreign investment in preference shares that are not fully convertible into equity shares, issued by Indian companies on par with foreign debt. It has implications on typical mechanism of venture fund investment. Checkout, this business standard’s educational piece about this developing story

Clearstone Venture Partners - Sectors of Open Interest

According to Sumant Mandal, managing director, Clearstone Venture Advisors, Clearstone, is actively looking to invest in tech-driven businesses in financial services, communications, content & entertainment segments.

In India, Clearstone has so far invested in Iindiaideas.com (bill desk $5 million), DigiBee (mobile handset $5million) Games2win ($5 million) India in March. Globally it has invested in a series of successful ventures such as eToys, Overture, PayPal, United Online and MP3.com

Here is a link to original TOI news item