India Investment Opportunities Jul 09

Not to be distributed without prior consent © Shantanu Bhagwat Early-Stage Investing in India Shantanu Bhagwat July ‘09 Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat Quick fact • In 2008, India overtook Canada in terms of amount invested in Venture Capital Udbha A v ssocia s * Source: APARC Stanford Report, March 2009; Amount Invested from Dow Jones Venture Source te

Not to be distributed without prior consent © Shantanu Bhagwat Quick fact • …although it still has a long way to go 50000 Amt Invested* 40000 30000 20000 10000 0 India China US Udbha A v ssocia s * Source: APARC Stanford Report, March 2009; Amount Invested from Dow Jones Venture Source te

Not to be distributed without prior consent © Shantanu Bhagwat A Roller-coaster… 4Q ’08 • VC Investments in India grow by 90% over the same period last year* 1Q ’09 • Meltdown toll: VC investments shrink to $49 mn, down 58%* Udbha A v ssocia s * Source: SiliconIndia and LiveMint te

Not to be distributed without prior consent © Shantanu Bhagwat …but macro-drivers still in place A demographics-driven , consumer-led growth… Overall Growth ~ 23% 1,268m 1,200 1,027m Population (m) 800 811m Fast growing consumer class 598m Segment growth 36% 400 0 2001 2016 0 to 14 yrs 15 to 59 yrs 60 yrs & above Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat …and a LOT of untapped growth Udbha A v ssocia s * Source: Roopa Purushottamam, Future Capital Presentation, April 09 te

Not to be distributed without prior consent © Shantanu Bhagwat Where are the “gems”? • Services • “A” teams with previous entrepreneurial experience • Sectors that are on a long-term growth trajectory • Education • Healthcare (incl. diagnostics, medical records etc) • My favourite: cleantech Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat Watch out for… • Misunderstandings • Pre-Money vs. Post-Money • Verbal agreements • Founding teams breaking apart • A long-distance investment strategy Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat India and China • Similar • Nascent VC ecosystem • A large and skilled pool of engineers, scientists • Rapidly growing domestic market • Geographically concentrated activity • …but also different • In terms of market focus • 87% domestic focus in case of China vs. 27% for India • Sectors • Internet, Software and Mobile Apps for China vs. Services and Software for India • Capital coming in (and amount invested) Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat Indian start ups - The edge • Strong outward (international) orientation • More hard-core technology plays • Remarkable focus on managing costs May well become formidable challengers to start-ups in US and Europe Udbha A v ssocia s te

Not to be distributed without prior consent © Shantanu Bhagwat For more • Visit my blog… Global-Themes.com • …and have a look at UdbhavAssociates.com The contents of this presentation and the opinions expressed therein (unless stated otherwise), are the intellectual property of Shantanu Bhagwat and should not be used, quoted, transmitted or distributed in any form or manner, without the explicit and written consent of the author. © Shantanu Bhagwat, 2009 Email: info@udbhavassociates.com Udbha A v ssocia s te

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India Investment Opportunities Jul 09

by Shantanu Bhagwat

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