Whatever fear has taken hold of the public markets, it has not yet trickled down to venture capital. Canaan Partners today is announcing its eighth fund—a $650 million early stage venture fund with an international bent. Some of Canaan’s Portfolio companies from past funds include DoubelClick, Match.com, SuccessFactors, Tremor Media, Lending Club, and Blurb. In addition to focusing on getting early stakes in U.S. tech and medical startups, Canaan expects to invest a quarter of the fund in startups from India and Israel.
If India is the next China for Web startups, the fund should do well. General partner Deepak Kamra explains that the low-hanging fruit there remains me-too versions of U.S. Web companies with a cultural twist, rather than companies that come up with startlingly original products:
In India, I’d love to do more new product companies. But we have to be realistic that there are only a handful of great product companies coming out of India. In the meantime, you have this huge domestic market just coming onto the Internet. You don’t need to be the latest thing. The adaptation of Web 1.0 companies is what is happening now.
Hopefully, though, in the coming years we will be seeing a lot more Zohos invade the U.S.
the thing with india is, unlike CJK markets, they surf only english so google and yahoo have been satisfying thier needs. ofcourse local stuff like craigslist/ebay though present are not getting traction. in future they cud get. there are already tons of local websites replicating craigslist,deals etc but none very popular. there were a few mail/search engine companies in mid 90s like rediff,sify,indiatimes etc some which still around but none having reach outside india.
“In India, I’d love to do more new product companies. But we have to be realistic that there are only a handful of great product companies coming out of India…..The adaptation of Web 1.0 companies is what is happening now.”
Perfect.
I hope that Indian tech-startups will start realizing that ’services’ boom won’t last long and they will have to move to creating products through innovation. With TCS/IBM announcing cuts in their workforce, I don’t think other companies will mind following them.
But VCs & Angels focusing on India is a good news!
@1 , I agree with you. I see that most of the startups are mere clones of US startups. Take example of Guruji (copying Google), Yaari (copying Orkut, Facebook etc.)… the list is big, you know!
the biggest blockbuster indian web success story still is… matrimonials! (and jobs to a small extant). social networks, job sites, search sites, real estate, etc haven’t achieved scale despite showing early promise. shopping and bidding online is so low it’s ridiculous.
the mobile market is gangbusters in india and pc’s are still very expensive. imho, real scale for any startup can only come by smart tapping of mobile interaction models and simply translate the web 1.0 ideas.
STOP DRAINING AMERICA FOR ISRAEL, CHINA AND INDIA!
As a bit of a political hawk I am big fan of military support for Israel. However, this does not mean I want to see us bleed. We are facing serious economical issues and our future is somewhat uncertain. We need to reinvest in broad set of technologies that help keep America strong. That means investing in US in gamut of areas from everything IT related, to green, nano, and etc.
Instead we seem to help bolster India’s China’s and Israel’s economy through investment and outsourcing. Short term profit thinking is short-sighted.
What about Pakistan ? It’s IT industry is rising so fast. And it’s population is equal to half of Europe’s population.
Canaan partners need to do some more research.
@5 Pakistan??
r u being serious or sarcastic??
Biggest problem with indian IT is lack of Broadband all over India.
People are still using 56kbps connection and you can’t surf internet on such low speed leave apart starting a new start up.
Who said INDIA isn’t the rigth market, the reason for every startup to be up and running and not to be techcrunched need not give justifying reasons for not having a proper startup!
THere ar plenty in the busines, what they eed at this stage unlike Valley is the Mentoring and nrturing of ideas, the local market is huge and untapped there hasn’t been any theory or university leasons to trp local markets in INDIA.
India is rich in its culture and diversifying values, but its been used for very diff. reasons, there has been lot of “me too” products within INDIA environment, I do have hopes they run provided they build the local essence.
There have been large use case scenarios,l ike ZOHO which is developed in INDIA but not used within INDIAN market, why not?? its matter of fact they haven’t targeted the right set of users in INDIA
some figures :
INDIA has about 60 million Govt employees, would anyone help them sort there things out, in saying they can make products which helps INDIAn environment??
Always aiming to get the pie out of dollars, need not justify, hope VC’s get lot of clues
there have been many products which are doing well locally, Mike should have a look at bringing Tech Crunch to INDIA.
Sri…
http://www.yulop.com
Hi,
India isn’t that different from what the Internet was like for the west in the early 90’s with a bit of difference in regards to knowing what works and technical advancement that already exists in 2008.
One of the problems for native companies is that the elite/middle-class general education/culture is so americanised/english that there’s less of a need to be local.
However, I think if those companies continue going, and raise their profiles locally, and think locally rather than aping what’s worked in the west, when the core population that might not be so enamoured with all things western being “cool” they will find their market.
Also, much like Japan, its likely that their won’t really be pc-web/1.0 and it will jump straight to subsidised/low-cost smart-phones.
People should remember that the original version of the web was released in 1991, it started gaining traction in 1994, gaining money/investment in 1997, and web 2.0 took off in 2006/7, while we’re still early stages for mobile, so its a long road ahead for india, let alone the rest of the world with less advanced communicaton networks -but the advantage they gain is being able to learn from western development and experience, though India is the largest maker of generic pharmaceuticals!
Yours kindly,
Shakir Razak
“Would love to see more product companies…”
Bastards!
Will always want Indians to go after the low hanging fruits. In 5 years world would have moved to the next big thing and Indians will still be chasing low hanging fruits.
fwiw, there are more indians in the valley doing startups than in india.
yes, broadband is main thing lacking in india
not many indian advertisers online and im sure thier pay per click is much lower than US
@10,
products are not low hanging, windows,yahoo! mail, google search, adsense are all products.
FusionCharts is from India
@11 read and understand what i said.
But if you have been working for a god forsaken indian body shop your ability to read and understand (and create) has been seriously dented. And now all you can do is make strong nationalist statements. startups done in valley belong to US not India, even if the founders are Indians. Its America that makes innovation possible, not superior indian genes.
FYI I am an Indian, but not a fool like you. I can accept the facts.
Poverty, Corruption, Lawlessness – do not aid ideas or innovations.
why in every forum do us Indians making it jingoistic, nationalistic and downgrade/reduce it to inane dialog?