VCism '06 From My Eyes

I was just seeing ContentSutra for updates on what companies are getting funded by Venture Capitalists (VCs) and angel investors. Check out this article on companies getting funding in 2006. I am sure you might have heard of many of these start-ups. Nearly 98% of these start-ups are dot-coms serving on retail or wholesale basis.

The amount of funding that these companies get versus the idea that they are pursuing, made me take a few observations:

1. Ideas in most of the services are not very creative/original or hitherto unheard of but infact such services have already been provided by some other provider across the globe in well-of countries eg: Burrp, Seventymm, Carwale.


2. They don’t provide unique service but instead most often they are directed at the general psyche/inclinations of the people. TutorVista hits at the psyche of every parent to get the best education for their wards at cheapest prices available; Carwale, solves the problem of asking agents, car mechanics to look for a second hand car.


3. These companies haven’t sprung overnight and claimed success. They have been around for at least 2-3 years. Like any other businesses these ventures too have challenges; if not competition then dynamics of predicting the trend a fickle consumer group will take. Because most of the businesses are aimed in areas which are still in nascent stages (such as IPTV, selling second hand cars on portals etc) or very limited in few areas.


4. The one big advantage (according to me) is that this business, although run by professional companies elsewhere, is still unorganized in the sense that not all such discrete services are provided by one giant service provider. This is a great comfort to any investor since the risk of stronger competitor/hostile-takeover is greatly mitigated.

Some of the ideas may seem too farfetched to be successful and may be dismissed with a wave of cynicism such as saying Indians ka koi bharosa nahin- jab dukaan ki CD nahin waapas karte to online waali to nahin hi karenge (for 70mm.com). But it’s the eye-popping figures which are noteworthy.

When we talk of globalization I think that not only all the companies are shifting their operations to India but the increasing polarized social status, probably increasing tendency of people to have one-stop-shop for most of the chores and easily accessible (hmm, internet) avenues of service is the reason people are taking cues from outside and implementing them locally. May be it’s this part makes the effect of globalization more complete and complement win-win argument.

P.S.: While I write this, I view these from the aspect of a user/ virtual partner and probably with a naïve sense too since I have no expertise in any of these areas. I am not even sure about the business models for these portals. Most of the portals are just fun to hang out (Mauj) or are just search portals (such as Burrp), so is the revenue model just advertising (Ad-sense, eh?)?