U.S.-based venture capital fund New Enterprise Associates raised $2.5 billion for its 13th fund and will allocate $375 million, or 15% of the total, to invest in Indian firms over 4 years with deal sizes between $30-80 million. The fund will focus on mid-market growth equity deals in sectors like services and clean technology. Bala Deshpande, a senior managing director at NEA, said emerging services sectors not previously organized are attractive, and that the fund has previously invested in logistics and financial software companies in India. While raising funds has been difficult in the past year, established funds that raised capital can expect fair valuations and modest returns.

1. U.S.-based VC to fund $375 Million in Indian firms
Tuesday,19 January 2010, 11:33 hrs
Mumbai: To focus on emerging markets, U.S.-based venture capital (VC) fund New Enterprise
Associates (NEA), which raised $2.5 billion (Rs.11,425 crore) in its 13th fund, will allocate 15
percent, or $375 million, for investment in Indian firms. The India portion of the fund will be
invested over a period of four years, with a deal size of $30-80 million, reports Mint.
"Our sweet spot will be the mid-market segment," Bala Deshpande, Senior Managing Director
told Mint. The new fund will also restructure its alliances in India. NEA-IndoUS Ventures - the
early- to mid-stage VC fund that NEA had partly sponsored - will now be known as IndoUS, she
said.
"Though (in India) we will be doing growth equity deals only, in some sectors we may enter
early and do follow-on funding till we reach $50 million," said Bala, who is the first Indian to
become a general partner of the 31-year-old fund. NEA-IndoUS, started in 2006 by Vinod
Dham, Vani Kola and Kumar Shiralagi, when NEA had no direct presence in India, raised $189
million in 2007 and has invested in firms such as mobile phone marketer mGinger, movie rental
service Seventymm Services, and online gift service Myntra Designs.
The services sector and the clean technology space are among sectors the company will invest in.
"A whole lot of emerging services will come into play which were not attractive earlier just
because they were not organized," said Bala. In India, NEA has so far invested in Delhi-based
RT Outsourcing Services, a reverse logistics company that moves products from the consumer to
the manufacturer for reuse or disposal, and more recently in financial software and systems,
which provides systems integration services and software to the banking sector.
"Even funds with a good track record have found it difficult to raise money with many trying to
raise funds since the past one year," said Jagannadham Thunuguntla, Equity Head at Delhi-
based investment bank SMC Capitals. "It is not good news for first-time fund managers.
However, for the ones who have managed to raise money and invest in 2009-2010 they will get
fair valuations and can at least expect modest returns."