SOURCE: Canaan Partners

June 06, 2006 05:30 ET

Canaan Partners, an Established Silicon Valley Venture Capital Firm, Opens an Investment Office in India

Given the Size and Growth of India -- and Its Nascent VC Industry -- Canaan Sees Enormous Opportunity

MENLO PARK, CA -- (MARKET WIRE) -- June 6, 2006 -- Canaan Partners, a 19 year-old Silicon Valley venture capital firm that specializes in early-stage investing, today announced that it has opened an investment office in Gurgaon near Delhi, India.

The office, which follows another Canaan overseas investment office opened last winter near Tel Aviv, Israel, will initially focus on Internet and wireless investments in one of the biggest and fastest-growing economies in the world. The office is managed by Alok Mittal, an established Indian entrepreneur and co-founder of JobsAhead.com (acquired by Monster.com in May, 2004), the biggest job-posting site in India. Mittal is also a founding member of Band of Angels India.

"India historically has had a strong cultural bias for innovation, and now with proven technical talent and a strong local market, we believe the time is ripe for entrepreneurship to flourish. We are ready to provide first rounds of institutional capital and are already receiving many interesting business proposals," said Alok Mittal, executive director, Canaan India.

India has a population of 1.1 billion and an economy growing at nearly 10 percent annually, and yet only about 3 percent of its residents currently use the Internet, said Deepak Kamra, a general partner at Canaan Partners. The mobile subscriber base is growing at the pace of 5 million new users per month. Kamra also stated that the New Delhi office could eventually rival the size of the firm's Menlo Park office. "We can act as strong catalysts for companies in India by building and assisting them on strategic operations, market development, and corporate partnering," said Kamra. "The growth potential is mind-boggling."

Canaan Partners already has an Indian investment track record. In 2000, it invested in Aztec Software, a software development firm that services the software industry, and in e4e, a diversified business-outsourcing firm. These were intentionally late-stage investments, Kamra noted, because early-stage investments were risky and management talent was scarce at the time. With an office in place, Canaan will now focus on early- and mid-stage investments, which offer greater growth potential.

Kamra has made a number of trips to India in the past five years and has already reviewed about 40 business plans, about half of which are getting additional scrutiny. Canaan is likely to announce a new investment in an early-stage Indian Internet company in the next 30 days.

According to Canaan, other private equity firms have some presence in India, but they tend to focus on later-stage, non-technology investments. Underscoring the distinction between the thrust of those firms and Canaan, Canaan was an early-stage investor in successful U.S.-based Internet companies such as DoubleClick, CommerceOne, Match.com and Blue Frog Mobile, and believes that similar opportunities exist in India. "Our early-stage Indian strategy requires actively working on behalf of our startups," said Kamra. "So having a local presence in India is a must."

"The U.S. venture capital industry recognizes that technology is a global market and that every aspect of creating successful companies must take this into account," said Charles Froland, CEO of Performance Equity Management and a Canaan Limited Partner. "Venture capitalists must make the necessary inroads to take a key role in the development of this process, and we believe that Canaan's expansion into India at this time is a logical next step in the growth of this market."

About Canaan Partners

Canaan Partners is an early stage venture investor. The firm catalyzes the development of innovative technology and healthcare companies to build next-generation market leaders. Founded in 1987, Canaan Partners has $2.4 billion capital under management and has invested in 232 companies, completed 60 mergers and acquisitions, and brought over 50 companies public. Canaan invests in Internet and consumer technology, communications, semiconductor and energy, enterprise software and services, biotechnology, and medtech. Canaan was an early investor in DoubleClick (DCLK), CommerceOne (CMRC), Copper Mountain Networks (CMTN), Immunicon (IMMC), ONI Systems (ONIS), Dexcom (DXCM) and Combinatorx (CRXX), along with dozens of other market-leading companies. Canaan has offices in Menlo Park, California; Rowayton, Connecticut; and Herzliya Pituach, Israel. For more information visit: www.canaan.com.

Contact Information

  • FOR MORE INFORMATION:
    Steve Kaufman
    New Venture Communications
    (408) 436-0774
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    Lisa Bergamo
    Canaan Partners
    (650) 380-9250
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