TECHINASIA: As smartphone usage booms across Asia and web services become more commonplace, private equity firms and venture capitalists are exploring the lucrative potential of the region. There are a number of global VC firms, especially in Silicon Valley that are keeping an eye on startups on the other side of the planet. Below we’ve identified some big-name VCs who have backed South Asian startups.
1. Morgenthaler Ventures
Morgenthaler Ventures has invested in over 300 companies around the world, including Apple. Since 2008, it has focused a lot more on venture capital investments and thus invested over US$400 million in various business ventures relating to IT and life sciences.
2. Sequoia Capital
Sequoia Capital is one of the world’s foremost venture capital firms, started in California in 1972 by Don Valentine, and is currently funding growth-stage companies around the world.
It is well known for having invested in some of the global IT giants of today including Google, Apple, Yahoo, and Amazon. The earliest investment by Sequoia in India was back in 2006 when it put US$20 million in Café Coffee Day over two years. Currently, Sequoia Capital India has as much as US$1.4 billion invested in a number of companies in the nation.
Sequoia has a special preference for technology companies that have India-US cross-border connections. The firm invests in consumer services, healthcare, energy, financial services, and a range of other sectors. Recently, Sequoia announced that it had raised US$530 million in its fourth India focused round of funding which will take its total investment in the country to US$2 billion.
3. ePlanet Capital
ePlanet Capital is a Silicon Valley-based global venture investment firm, with offices around the world. The firm has made more than 100 investments in 14 years and focuses on the sectors of internet services and applications, entertainment, and life sciences.
The firm invested in Pakistan’s Naseeb Networks, maker of a social networking site calledNaseeb, and Rozee.pk, an online recruitment website. This Rozee funding is often thought of as the first international investment in a Pakistani web startup.
4. Global Founders Capital
Rocket Internet’s founders teamed up to start Global Founders Capital, which aims to invest seed funds as well as late-stage funding. This venture capital firm started with almost US$180 million and has already invested in a couple of internet businesses. Rocket Internet has focused on investing in lucrative internet businesses in South Asia, the Middle East, South America, and Africa. Its portfolio spans over 50 companies in almost 40 markets.
5. Fenox Venture Capital
Fenox Venture Capital is a venture capital firm that is based in Silicon Valley and which has spread its roots globally through investments (disclosure: Fenox Venture Capital is an investor in Tech in Asia. See our ethics page for more information). The company usually focuses on working with emerging tech startups and companies and has assisted enthusiastic entrepreneurs in Asia, Europe, North America and the Middle East.
Fenox recently launched a US$200 million fund for the Bangladeshi IT and media sector. It aims not only to provide early stage funding for Bangladesh’s startups but also promises final round funding and other angel backing.
6. Nexus Venture Partners
Nexus Venture Partners is a Mumbai, India-based VC firm that is considered among the leaders in the local market. It backs growth stage companies either in its home nation or companies in the US that have products and technologies relevant to emerging markets.
Nexus Venture Partners invests in a wide variety of sectors, from technology, cloud storage and big data analytics to media and energy companies. Typically it makes six to eight investments in a year, investing up to US$10 million in early stage companies with a second round of investment based on how successfully a company has implemented its business plan. Nexus was started in December 2006 and currently has a stake in over 50 companies.
It has an estimated US$600 million under management. In 2012, Nexus raised a US$270 million fund to help Indian companies break into global markets as well as to support US-based companies focusing on India.
Nasscom is an IT and business-focused trade association in India. It’s not only a local organization but has global connections, with more than 1,200 members and over 250 global companies in collaboration from the US, UK, and Europe.
Nasscom’s member companies run the gamut, across IT products, infrastructure management, R&D services, ecommerce and web services, engineering services, offshoring, animation, and gaming. Therefore, it has made a lot of investments in the tech industry. A while back, Nasscom set up the 10,000 Startups program to bring angel investments, mentorship, and accelerator support. This initiative is being supported by Google, Microsoft, and Intel.
8. Ardent Capital
Ardent Capital was set up by entrepreneurs in Southeast Asia.. It has invested in a range of companies across Asia, including Sri Lanka’s Wow.lk, which has a 80 percent share of the ecommerce market in Sri Lanka. Ardent Capital is a young team, having only started in 2011 and is currently expanding its operations to invest in more early stage technology companies in the region.
9. Frontier Digital Ventures
Frontier Digital Ventures is a Malaysia-based VC that has a prime focus on investing in classifieds and listings businesses. The firm is active in Pakistan where it has invested in Pakwheels and Zameen. Frontier DV invested almost US$3.5 million in Pakwheels; its undisclosed investment in Zameen means it has a significant but non-controlling share in the property listings site.
10. Kima Ventures
Self-styled as the most active angel investors in the world, Kima Ventures has made more than 300 investments in almost 290 companies. This French VC funds with seed capital in promising startups.
Its investment portfolio is quite diverse, in which it has made investments of more than $15 billion. The firm identified the potential in the Pakistan-made, globally-focused Groopic andinvested a six-figure sum in the fun photo app.
Etohum is an Istanbul, Turkey-based startup accelerator program that provides funding to tech startups. The firm has been investing seed money since 2008 and has invested over US$40 million in more than 35 startups and companies.
It spotted and backed the Pakistani app Bookme, a mobile app for booking movie tickets. The accelerator’s crew saw Bookme at the Startup Istanbul event and expressed its willingness to fund the startup.
South Africa-based Naspers has invested in a lot of companies related to ecommerce, online services, print media, and pay television. More than 80 percent of the strategic investments that Naspers does is in India.
The biggest name Naspers has backed is Flipkart. The homegrown Indian ecommerce giant was initially funded with US$100 million, but it has since raised US$1.75 billion in total. The company has also made significant investments in the popular classifieds site OLX.
For a better international investment ecosystem for the region, it would be highly beneficial if the governments across South Asian nations develop a forum to lure global VCs to the region. With a strategic location, inexpensive labor, a large base of consumers, and quality technical education, tech startups have a lot to contribute to these countries’ economic growth.