Is the Venture Capital Market in India Getting Overheated?
The Venture Capital market in India seems to be getting as hot as the countrys famous summers. However, this potential over-exuberance may lead to some stormy days ahead, based on sobering research compiled by global research and analytics services firm, Evalueserve. Evalueserve research shows that an interesting phenomenon is beginning to emerge: Over 44 US-based VC firms are now seeking to invest heavily in start-ups and early-stage companies in India. These firms have raised, or are in the process of raising, an average of $100 million each. Indeed, if these 40-plus firms are successful in raising money, they would garner approximately $4.4 billion to be invested during the next four to five years. Taking Indian Purchasing Power Parity (PPP) into consideration, this would be equivalent to $22 billion worth of investment in the US. Since about $1.75 billion (or approximately 40% of $4.4 billion) has already been raised, even if only $2.2 billion is raised by December 2006, Evalueserv
