Proto ‘08 July: New Delhi Notes 2

We’re having a coffee break at Proto.in, the New Delhi Edition. And there is some ancient music, instrumental, bleating out of the speakers in the auditorium. I absolutely love the venue — IIT Delhi is much better tended than the Bombay version. But you have to go right out of campus to buy basic necessities such as nicotine, etc. The WiFi is still not working — wonder what happens to the live-blogging to win iPod Touch contest…

Sessions so far have been not too bad. I caught Mahesh Murthy from Seedfund being his usual forthright self in the pre-lunch session on ‘The Art of Marketing Your Startup’. My pick of his comments from the session — “Twitter is great timepass, but I wouldn’t invest in it.” Seedfund, as you know, is raising its second fund and as Business Standard had earlier reported, it is indeed going to be a $30 million fund, maybe a bit more. Existing investors are expected to return to Fund II and Fund I, which had a $15 million corpus, will be fully invested shortly with 13-14 portfolio investments.

Dimdim’s DD Ganguly On Plans Post Funding

Open source web conferencing startup Dimdim, headquartered in Burlington, Massachusetts, with development operations in Hyderabad, recently raised $6 million in Series B funding from Draper Richards and existing investors Index Ventures and Mumbai-based Nexus India Capital. In its first round, the company had raised $2.4 million. The company, which has three products just out of beta — Dimdim Free, Dimdim Pro and Dimdim Enterprise — employs 19 people across its offices in the US and India. Co-founder and CEO, DD Ganguly (photo), who sold his first company AIM Inc in 2001 to Computer Associates, spoke to Startupcentral about how the company will deploy the fresh funds, revenue streams and the curious story of how Dimdim came to be known by its name. Edited excerpts:

Q. You’ve raised venture money in a difficult fund-raising environment. How tough was it?

A. In our case it was not so difficult because we were not actually planning to raise money at this point of time. Because Dimdim has a lot of traction in the open source community and after our launch a lot of venture capitalists came to us. Our plan was to raise money a few months later into the year. But since venture capitalists started speaking with us around December…we were just having casual conversations at the time…we got multiple term sheets in this difficult environment.

Q. You have an interesting mix of investors — two based in the US and one in Mumbai. What does this combination bring to the table?

A. If you look at the investors collectively — Draper Richards, Index Ventures, Nexus India Capital — the three have very rich experience in collaboration software and also in open source software.

Proto ‘08 July: New Delhi Notes

Proto.in kicks off tomorrow in New Delhi at 9.00 am sharp — registrations open at 8.30 am. I haven’t got my ‘entry ticket’ because I didn’t register but I hope they will let me in anyway. The media registration link on the website doesn’t seem to be working. Anyhow, moving on, the agenda looks interesting in parts — the very articulate and distinguished Kiran Karnik (former president of Nasscom) opens the event with a keynote. I will miss it, unfortunately — don’t get into the city before 11.00 am. Most of the other Day 1 sessions are just about alright. The post-lunch session, actually well after lunch, with Jumpstartup’s Sanjay Anandram ‘Reconciling Entrepreneurs and Investors’ should be worth listening in on, simply because it seems like an impossible thing to do

Day 2 is the day to look out for — the startup showcase starts at 9.45 am. It might be a good idea at this stage to do a recap, even a post mortem of startups previously showcased at Proto.

I’m personally looking forward to meeting the huge contingent of venture capitalists Vijay has been promising at the event. I spoke to a few firms ahead of the event on what they expect and here are some of their responses:

Bill Draper Back In India…Almost

Just back from Baramati or thereabouts and wish I had taken the laptop along. The region apparently has excellent WiFi connectivity and I missed out on an opportunity to blog from the field. It is never quite the same when you get back to concrete Mumbai and try to recapture the essence of the experiences back there. Anyhow, I’ll put up some interesting photos as soon as the embargo is off — do catch the next issue of Outlook Business.

Much has happened in the interim. Dimdim got funded and Contentsutra’s parent ContentNext Media got acquired — UK’s Guardian News & Media bought it for over $30 million. I expected exactly the opposite…that grapevine seems to have mixed things up horribly. The Dimdim deal, specifically, is interesting because it sort of brings back Draper Richards to India — the firm led a $6 million Series B investment round. Draper Richards is in a way connected to Draper Fisher Jurvetson (DFJ) — the first is led by William H Draper, III

first half vc deal run robust, non-tech gains share

Good news for Indian startups and early stage companies. Venture capital investments during the first six months of calendar year 2008 touched $340 million across 51 companies. This compares very favourably with investments during all of 2007 which saw investments at $540 million across 98 companies. It may be too optimistic to hope that venture capital investments will touch $1 billion by the end of the year, but no harm done in aiming high.

Significantly, during the first six months this year, non-technology companies accounted for 40% of deals. Technology companies continue to dominate with a 60 per cent share but this has been gradually reducing over the years. Venture Intelligence’s Arun Natarajan notes, “Venture capital investments are increasingly focusing on alternative energy, media, retail and other consumer demand-led sectors.” Venture Intelligence is a Chennai-based research firm focused on the private equity and venture capital space and has just released its second quarter (April-June) findings deal activity in the Indian venture capital and private equity — VI Private Equity Release — space. The venture capital findings — VI Venture Capital Release — are in collaboration with the US-IVCA.

tie-canaan challenge picks

Update: Oversight on my part. TiE-Canaan announced the winners of its entrepreneurial challenge on Saturday — Equitas, Druvaa and iKen. More details here.

Proto.in unveils its showcase startups next week (July 18-19) and I hope to catch a few interesting companies. Meanwhile, the TiE-Canaan Entrepreneurial Challenge 2008 finalists have been in the public domain for for some time. They will pick three winners out of the eight finalists soon. Meanwhile, here’s a quick look at some of them:

The last on the list, Equitas Micro Finance India, is the only pure non-technology venture on feature. This is a regular micro-finance company and operates out of Chennai, serving Tamil Nadu. Seems to be a one-year old company and is targeting 1,80,000 members in its first year of operation. The founders come from NBFC backgrounds (promoter and managing director PN Vasudevan was with Cholamandalam Investment & Finance). I’m a little intrigued by the profile description for COO S Bhaskar. It says he “started in Pricewater House…” Doesn’t quite sound like the PwC we are familiar with. I picked this company because it kind of sticks out in the line-up. Micro-finance is still a niche business but a fairly established business model, in India and globally. Does Equitas really need to contest its business plan in this sort of an entrepreneurial challenge?

winding down web 2.0 startups

peHUB’s Connie Loizos has an interesting interview up with Martin D Pichinson, co-founder of Silicon Valley-based business consulting firm Sherwood Partners, on business looking good in the Valley on account of imploding Web 2.0 startups.

Excerpt:

Q. Where are these startups, and their backers, going wrong?

A. Well, you’ve got to start bringing in companies like Sherwood early to work with managers and help shave off costs. It’s all about extending the runway long enough that customers can absorb a product. Everyone comes up with this cockapoo about startups. It’s not about being smart. It’s about being around long enough.

Q. Cutting costs, negotiating better — these sound like business fundamentals that a startup’s VCs should be helping with.

A. This is what people don’t understand: decades ago, when a VC put money into a Cisco or HP and sat there and worked with them, they were managing a $2 million fund. Now, with funds the sizes they are, do VCs really have the time to work with all these companies when they don’t know which will be the winner? No.

Read the rest of the interview ‘A quick conversation with Silicon Valley’s ‘Undertaker” here.

energy unlimited at pune occ

Pune OpenCoffee Club Report

By Santosh Dawara

In every Pune OpenCoffee Club meet, you cant help but notice the energy that entrepreneurs bring with them. It is exciting and infectious. However the Pune OCC chapter is proving to be more than just about youth and learning. On July 3rd, Neeraj Arora from Google (corporate M&A) and Neill Brownstein and Anjana Kaul of Footprint Ventures spoke about their respective organizations and philosophies. Over 50 Pune OCC members turned up for the event.

The newer members have been asking whether OCC works with a blueprint or plan. It does not. Just like other OCCs (especially Chennai), the Pune OCC was started to accelerate networking and so far it has worked incredibly well.