Dotcoms, they are back,

Last Year venture Capital (VC) FIRMS ARE ESTIMATED to have invested more than $32billion globally. What’s the significant about that number, apart from its absolute size, which is more than 3percent of India’s GDP, is the fact that it represents the highest VC investment in the last 5 years, In Fact, some skeptics fear that the investment figures are rising to the bubble levels 10years Ago. But it is unlikely than that things will turn out as bad as they did the last time around. VCs have become much more cautious, and no one has money anymore for ideas that only exist on PowerPoint Slides.

In India too, dotcoms made a strong comeback in 2006. Compared to just two investments in 2005 worth $17 million, there were 27 investments worth $ 166 million. What were the dotcoms that got funded? First of all, none of these was really early stage. More often than not, these were dotcoms that had managed to get to a certain scale and demonstrate a clear path to profitability. Therefore, you had Sequoia Capital and Battery Ventures investing $15million in travel portal, Travelguru.com; Norwest Ventures picks up a stake in Sulekha.com, a member driven community portal.


An important aspect of the dotcom boom this time around in India, as much as the US, is the emergence of so-called Web 2.0 Companies. These are websites that are built around the surfer communities, and often depend on the user-generated content to survive. You tube, bought by Google late last year for $1.65 billion, is a classic example.

Although, no one knows how such ventures will make money, everyone agrees that Web 2.0 features are crucial to enhancing the stickiness of a website. Even old media companies in India are talking of Web 2.0 strategies to attract and loyal base of users. CEO Technoport Solutions www.technoportsolutions.com , Abhishek Bali, while talking to Business Today said “No one doubts that internet is the new medium , and that India—despite its 45 million internet users and Rs 240 – crore online advertising market – will be a key market in years to come,”

When asked about the Physical Office premises , after evacuated due to sealing in New Delhi, CEO Technoport Solutions www.technoportsolutions.com , Abhishek Bali said, We will soon have a full fledged office in India to deal with the huge surge of Interest,’ He declares” We’ve made investments in Companies like (jobdost.com, Webchilly ,(webchilly.com), but there are dozens of other opportunities,”

Alok Mittal of Canaan Partner agrees that VCs have been cautious, but says that maturing market will demand investment more locally focused companies. “As the ecosystem matures, you will see VCs invest more heavily in early stage given the potential in the Indian market,” Says Mittal, Lets hope he’s right.