It’s raining Venture Capital funds for Indian, S Asian firms

MAKING a mark in the field of venture capital, companies run by Indians and South Asians in the US last year raised more than $1.45 billion. In the first six months of this year, they raised $591.2 million.

This is 6.55 percent of the total venture capital raised by US companies last year, a survey report released last week said. This amount was collected by some 100 South Asian companies only, a overwhelming majority of whom are run by Indians.

Released by IndUS Business Journal, a premier business publication here covering South Asians in the US, the survey revealed that South Asian companies more than doubled the average deal size of other US businesses. The average deal size for South Asian companies last year was $14.52 million, the report said.

According to a report by Ernst Young and Venture One, the average deal size of US companies last year was $6.6 million. In all, the US companies raised $20.35 billion in venture capital last year. While other companies have dropped out, it is the South Asian companies that are keeping up the momentum, the IndUS Business Journal editor Martin Desmarais, told The Indian Express.

Incidentally the top three South Asian venture capital recipients in the 2005 survey are from San FranciscoFiber Tower Corp. ($150 million), Cerimon Pharmaceuticals ($70 million) and Soma Networks ($50 million). These are followed by Techbooks of Virginia ($45 million) and NexTone Communications of Maryland ($35 million). Fiber Tower, which specializes in backhaul networks for wireless telecommunications companies, so far has raised $225 million since being founded in 2000.

This is not all, if the money raised by South Asian companies during the first six months of this year is of any indication. Another survey released by the IndUS Business Journal said US-based South Asian companies received $591.2 billion in the first six months. This is ahead of last year’s pace, when South Asian companies collected $447.65 million in the first six month’s of 2005, Desmarais said.

The top South Asian venture capital recipients for the first six months of 2006 include: PA Semi of Santa Clara, California ($50 million) Catalyst Biosciences of San Francisco, California ($30 million) Global Consultants of Morristown, New Jersey ($30 million) Atrica Inc. of Santa Clara, California ($28.2 million) and mFormation Technologies Inc. of Edison, New Jersey with $24.5 million.

‘‘As the venture capital market in the US has stabilized and increased over the last several years, South Asian entrepreneurs have proven to be leaders in the investment arenaattracting increased funding and interest from major venture capital firms,’’ said Upendra Mishra, managing partner of the Mishra Group, publisher of the IndUS Business Journal.

‘‘South Asian entrepreneurs have a great track record as founders of successful companies. They continue to develop innovative technology and products, making them a solid investment in the changing global economy,’’ he added.