[qi:046] The truth about Indian start-up scene is that there is more money than actual start-ups. We have talked about it before, and we will say it again. Venture Capitalists – both local and US-based are showering money on start-ups, some of them quite marginal.
Google is adding to the money-shower by becoming an institutional member of the Band of Angels (BOA), a group based out of New Delhi.
It doesn’t mean that there is going to be an investment – since BOA is not a fund – but it opens up the potential of an investment for start-ups that catch BOA’s fancy. This is not the first time Google has taken an institutional approach. It had previously invested $3.75 million in Ventureast TeNet Fund. It has also taken a limited partner (LP) role in Erasmic and SeedFund. In a related announcement, Cannan Partners of Menlo Park announced first round investment of $5 million in techTribe, India’s Career Networking portal. Cannan’s New Delhi man, Alok Mittal is also a founder of the Band of Angels.
10 thoughts on “Google bets on start-ups in India”
The problem with the start-up funding in India is that the venture funds are all running after the 1 million+ deals and there aren’t many of those. They are getting bid up. The real seed deals that could use $100,000 (and there are tons of those), aren’t getting that much notice. There are only a handful of angel groups at this point.
It’s still a very welcoming news to see Google’s money put in India. Lots of potential there.
In term of developer talent there certainly is a lot of opportunity. OTOH, most Indian start-ups I see are merely emulating other services already developed in the US and Europe. There is little understanding of the available markets or how to _go_to_market in the profitable marketplace that is the US.
Someone should simply find an easy way to hook-up Indian developers with US marketing and bus dev folks. This is a start-up in and of itself. Let me know when it is together.
Advertising as a business model still hasn’t picked up in India and so far we have seen only transaction oriented sites making real money. Other than travel/job/matrimony sites, there aren’t many success stories. Not much M&A activity in the Internet sector either. Given all these factors, it will be interesting to see where money gets invested. Also it might turn out to be a good test of patience for the investors as the Internet still doesn’t seem to have reached critical mass (20 million users is the most optimistic estimate with less than 2 million broadband users)
India is one of the world’s fastest growing mobile markets with about 5.5 million people signing up every month. With the cell phone becoming ubiquitous even in rural areas, internet-enabled ‘feature phones’ gaining in popularity, and with recent advancements made in better rendering of web pages on mobile devices, this sector represents a huge Indian market waiting to be tapped.
I think the investment scene in India is very hot especially with the boys like reliance (ADA Group) jumping in the net business citing great oppurtunity considering the fact that net penetration in India is only 6% also there are a couple of great websites created by indians like the unique worldallservices.com which is a totally different concept and really appealing
We’re looking for uber talented Indian developers, specifically for the development of web applications, widgets, Facebook apps.
The mobile internet is where the market is, we’re also looking to provide angel funding in this area and offer marketing and interface support.
I’m not sure there is too much investment capital chasing India. It is growing a lot, but it is still a lot less than the US adjusted for the economy.
I did a little bit of analysis on the subject: http://amargoel.com/ .
Google investing in all these startups should be of serious concern to the startups and to other major competitors such as Yahoo! and Microsoft. Basically, Google could see what all these startups are doing before they establish serious presence, and has an inside track to the companies before Yahoo! and Microsoft ever find out about them.
Well the credibility of having Google behind them might be enough to give any group a competitive advantage.