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June 29, 2010

Flurry of deals around Group Buying

MediaNama, which recently had a roundup of online group buying services in India, has followed it up with an interview with Smile Interactive Group's Harish Bahl. Smile's joint venture firm Deals And You recently acquired group buying startup Wanamo. (This deal closely followed Battery Ventures and Grelock Ventures committing $8.75 million to another Indian group buying service, Taggle.)
There’s a lot of VC interest in this space, and that has largely to do with the success of groupon globally; they want to put money behind a working model. If you look at it from an India perspective, it’s a model that is very well suited – there is value for merchants and buyers, and a great marketing platform for services segment in the SME space. Finally, this is performance based marketing, and the Internet consumer in India is a deal seeker.

...The bad news is that this model has very low entry barriers. The good news is that it’s a model that is hard to scale

...GroupOn works on around 50% margins, and 30-40% margins is what this market might settle at.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

June 25, 2010

"The King of Cold Calling"

Forbes India has a profile of financial services distribution firm NetAmbit, which has raised VC funding from Bessemer Ventures and more recently, Helion Ventures.

NetAmbit is the undisputed leader in India at cold-calling anyone and selling them financial products. It is 5-6 times bigger than its nearest competitor in the space, says Tarun Chugh, executive vice-president and head of sales and distribution for ICICI Prudential Life, India’s largest private insurer.

...For the year ended March 2010, NetAmbit sold insurance policies worth Rs. 450 crore, of which new policies accounted for Rs. 200 crore. Girish Batra, 44, its founder and CEO, says this was 12 times what he sold just three years back in 2007, and will become Rs. 800 crore within the next year. His income by way of commission on these sales was Rs. 90 crore which he projects will become Rs. 185 crore by next year.

...“India is a push market, even a product like a personal loan is sold and not bought. We are fine with any name and number, we believe every household has the ability to buy insurance. In smaller towns people don’t mind getting these calls, in fact they’re happy,” counters Batra.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Hemu Ramaiah – Story of an Indian Retail Pioneer

At Venture Intelligence, we recently had a great experience interviewing Hemu Ramaiah, founder of the Landmark bookstore chain (in which the Tatas acquired a majority stake in 2005). For me, the interview (which is part our Entrepreneur Podcast series "Entrevista") served as a confirmation that a customer facing role is the best start to an entrepreneurial career.

Other key takeaways from the podcast:

* “Make Your Own Mistakes”
o Trust Your Gut (based on your understanding of customer needs)
o “Don’t let Accountants take over your business”
o Examples: Deciding to get software designed by a start-up firm (which made the effort to understand her requirements better), deciding not to charge extra for courier delivery for Internet orders, deciding to buy (rather than rent) space for the stores, etc.

* Importance of Growing the Market vs. worrying overly about competition

o Amazing story of how she decides overnight to start supplying books to her competitors (in order to boost volumes for the import orders)

* Choice between Private Equity and Strategic Investors

* Planning the Personal Exit

o Because “business is a treadmill” and “life shouldn’t pass you by”
o Basing the decision on an age cut-off (rather than some target corpus)

* Converting Problems into Opportunities
o When she learns that her daughter’s schoolmate has never visited a bookshop, Hemu decides to turn the problem (of parents not exposing their children to books), by “taking the bookstore to the school”.

You can download the full podcast (and find links to other other interesting Entrepreneur podcasts) from the Entrevista blog at http://www.entrevista.in

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. Request free samples of Venture Intelligence newsletters and reports.

June 22, 2010

Deal Alert: Mayfield invests Rs 40-Cr in higher education firm Centum Learning



Edited excerpts from the Press Release:

Mayfield India Fund has made an investment of Rs 40 crores in higher education firm Centum Learning Ltd, a Bharti Group firm. Mayfield's Vikram Godse would be joining Centum's board of directors.

Centum has set up more than 130 vocational education centres in 90 cities across India. It has now launched another initiative - Centum U - Institute of Management & Creative Studies, which offers various undergraduate and postgraduate programmes in New Delhi, Mumbai, Pune, Mohali and Hyderabad. Besides this, Centum Learning is actively engaged with the State Governments to develop globally deployable skilled manpower and enhance employability quotient of both urban and rural youth.

For more information on Centum, visit http://www.centumlearning.com/

About Mayfield India


Mayfield started investing in India in 2006, and with a dedicated India
fund, raised in 2008, has made direct investments in companies like Satya Paul, Geodesic Techniques Fourcee and Paymate. Mayfield India focuses on companies with substantial operations in India that have the potential to become global leaders, with a special interest in Consumer, Specialty retail, technology & technology enabled services, infrastructure ancilliaries and Agri related companies.

For more information on Mayfield India, visit http://www.mayfield.com/india

June 19, 2010

The LP view of VC Funds

Chris Douvos has put up an interesting set of slides on how institutional investors view VC funds as an asset class. (Section 4: Whither Venture Capital Allocations? is especially interesting.)

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

"India tops BRICs for Infra Investments"

The Deal magazine has a Cover Story on infrastructure investment opportunities in the BRIC countries with a special highlight on India.

Of all the emerging markets, India best illustrates the benefits -- and the pitfalls -- of PE investment in infrastructure. It has one of the longest track records and runs neck and neck with China in attracting the most infrastructure-related funds and investments. "There's no better place to be," says 3i's Bagla.

...AMP launched its first Asian infrastructure fund in 1994, as did American International Group Inc., through its asset management arm. AMP pioneered the field in India five years later, starting a modest $40 million fund fashioned in conjunction with Indian mutual funds manager Unit Trust of India, now UTI Mutual Funds. That fund is fully divested. AMP launched a second, $120 million fund in 2004.

Britain's 3i started to invest in India in 2005 as part of a global infrastructure fund. It really cranked up participation, however, in 2007, when it announced an India infrastructure-dedicated fund. The $1.2 billion fund closed a year later. 3i itself invested $250 million...Macquarie has been slower off the mark but anticipates an even bigger presence. Its Macquarie-SBI Infrastructure Fund was launched last year in conjunction with the State Bank of India and the World Bank's International Finance Corp. Each committed $150 million. At latest count, the fund has raised $1.037 billion.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

June 10, 2010

Deal Alert: Agri-logisitcs firm Sohan Lal raises Rs 10-Cr from Nexus Ventures

Edited excerpts from the press release:

Sohan Lal Commodity Management (SLCM), an agri-commodity logistics and procurement company based in Delhi, has received a Rs 10 crore investment from VC firm Nexus Venture Partners. Sandeep Singhal of Nexus Venture Partners will join the Sohan Lal Commodity Management board. ICICI Bank was the sole advisor to this transaction.

SLCM provides comprehensive agri-commodity warehouse management and procurement solutions to farmers, processors, traders, agri-exchanges and government organizations across 70 locations and 12 states in India. Last year the company handled over Rs 5,000Cr of agri-commodities ranging from grains, oilseeds, pulses and spices among others. SLCM works with leading commodity exchanges as their delivery partner across India and provides collateral management for banks for their warehouse receipt based financing products.

Speaking about the funding, Mr Sandeep Sabharwal, Founder & CEO, Sohan Lal Commodity Management, said, “We plan to become the leading agri-logistics company in India covering the whole gamut from farm to port. The funding will help us expand our warehousing capacity and help us grow our pan-India presence.”

For more details about SLCM, visit www.slc-india.com

For more on Nexus Venture Partners, visit www.nexusvp.com

June 09, 2010

Deal Alert: Komli acquires Australian online advertising firm PostClick

Nexus Ventures- and Helion Ventures-backed Komli Media has acquired PostClick, Australia’s leading premium website representation firm, to become the leading digital media network platform across Asia Pacific. Together, the company now reaches over 30 million monthly unique visitors across the region.

Founded in 2001 and headquartered in Sydney with offices across Melbourne and Singapore, PostClick exclusively represents Bloomberg and Hotfrog amongst other premium websites.

Komli Media has built strong relationships and partners exclusively in India with top global publishers including Facebook, Expedia and Miniclip amongst others. The company is headquartered in Mumbai, India and has offices in New York, Toronto, Palo Alto and New Delhi.

Andrew Lockwood will continue as Managing Director of PostClick and will continue to oversee the PostClick business. PostClick will operate as a division of Komli Media. PostClick was advised by Alister Coleman of A.G.Coleman & Co.

For more details, visit http://www.komli.com/news/news/postclick.php

Event Alert: Urban Transport Congress on June 24-25

Ideas Exchange is organizing Urban Transport Congress (UTC) India 2010 at the JW Marriott Hotel on June 24–25. The event will be a forum for decision makers in the infrastructure and transport planning and project execution space to interact, ideate and maximise growth opportunities.

Investment in infrastructure will have to expand from over $500 billion in the current plan to $1000 billion in the 12th Plan period. The sector stands to gain tremendously from the multi billion dollar investments waiting to happen. There is a renewed focus on cities and money is being pumped into making India’s cities world class with integrated transport systems. However, there are concerns and hurdles that need to be addressed for the market to keep in step with the dynamic growth story.

UTC India 2010, the first of a series of annual congresses, was created to bring together decision makers and stakeholders in the urban infrastructure space. This would allow networks in a collective environment to participate and contribute to the developments that will make India’s cities world class.

Developed based on feedback from investors, planners, project developers and thought leaders the UTC series allows participants to be involved in an engagement opportunity allowing learning and development to push the industry forward and generate positive results.

For more information, visit http://www.urbantransportindia.com
or Contact Urvashi Kumar, on
Urvashi.kumar@ideas-exchange.in/ +91 (0)9820 60 0649

June 06, 2010

Young Entrepreneurs' Summit on June 18, 2010

The Indian Young Entreprenurs' Forum is organizing its summit on June 18 in Mumbai to provide a platform for networking, contact building and understanding new opportunities and challenges for young entrepreneurs in National and International markets. Eminent speakers from Corporate, MNCs, Banks, Industry, Technology, International Trade, Private Equity and Venture Capital Firms, Consulting Agencies, Marketing, Government, Entertainment, Arts and the Ministers and prominent personalities from different fields will interact, guide and create awareness amongst the entrepreneurs.

This will also elaborate on enhancement of business activities, capacity building, export promotion, acquiring latest technology, equity funding, banking finance, strategies to enter into new markets, business collaborations and alliances, skill development, set up new enterprises and expansion, changing mindset of the family run business, quality management, productivity improvement and other business opportunities. The Summit will also discuss on various issues and problems of the young entrepreneurs to survive in the competitive market.

View program details here.

For more information about participation, please contact Saakshi Kulkarni at youngentrepreneur1@vsnl.net/+91-22-66770218.

June 03, 2010

Is Bangalore losing its start-up edge?

Deepak Srinath of Viedea Capital, an angel funded investment bank that recently opened its first non-Bangalore office in Mumbai, has a post on why the firm "does not have a single client in Bangalore today (and) what’s more, in the last six months, we have hardly come across a firm from Bangalore that has really excited us."
...we continue to see plenty of startup’s from Bangalore, but very few of them are ‘doable’. I think the real reason is because the Bangalore entrepreneurs’ greatest strength (tech savvyness) is also his greatest weakness. He/She is enamored by a brilliant technical idea, but fails to do enough diligence on the market or requirements of the intended users. The real opportunity today is for businesses that seek to serve the burgeoning Indian domestic market. In our interactions, we often find that entrepreneurs from Mumbai, Delhi and even Pune, seem to have a much better understanding of the market and consumers than those from Bangalore. They build their products and services for the market and not the other way round, ie, build a product and then try to find a market for it.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

June 02, 2010

The Shale Gas Revolution

In an article in the Economic Times, Swaminathan S Anklesaria Aiyar argues how new technology is helping economically extract gas from shale rock, which in turn promises to revolutionise both the world energy scene and global geopolitics.
Russia, Iran and Opec are going to be greatly weakened, while the US, Europe and China will be greatly strengthened. India can be a major beneficiary....some countries may start converting their transport fleets into gas-based ones, hitting the demand for and prices of petrol and diesel. Fourth, converting gas into oil will become economic.

...Shale has long been known to contain natural gas, but this was not worth extracting with conventional technology. Now a new technology, ‘fracking' , plus horizontal drilling, have greatly increased shale gas productivity, so extraction is now viable at $3-4 /mmbtu. The new technology has been pioneered in the US so successfully that the US has overtaken Russia as the world's biggest gas producer. US gas reserves have increased from 30 years consumption to 100 years consumption. Port terminals to import LNG (liquefied natural gas) into the US will instead export LNG to Japan.

The US dream of energy independence remains fanciful, but its dependence can indeed fall dramatically. Historically , the price of gas was linked to that of oil: gas cost one-sixth to oneseventh the price of oil. That equation has been smashed in the US, where oil costs $72/barrel but gas costs one-eighteenth as much ($4/mmbtu).


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in