Alok Mittal recently joined Canaan Partners, a 19-year old US-based VC group. Mittal is setting up the India office of Canaan and will be spearheading its activities out of Gurgaon, near Delhi. His designation is Executive Director (click here for the profile). Canaan raised its seventh fund of $450 million (10 year tenure) last year, and India investments would be made out of this fund, besides funneling into Israel and US.
Mittal, as most of you know, co-founded JobsAhead.com, exited in favour of Monster India, and briefly worked with Baring Private Equity before the current assignment. Mittal is one of the few Indian VCs who are passionate about helping startups. He even runs a blog called Venturewoods.org for the startup community. In short, he is a VC who is more comfortable with start-ups and early-stage entrepreneurs. As part of his job, he will of course fund late stage ventures too. Also, Canaan is a different VC. Most of their investment managers have an operating background. And that helps. Because they have been there and done that, unlike an investment banker-turned VC.
ContentSutra caught up with Mittal at his residence in Gurgaon last week and here is the audio version of the interview (ok, podcast!).
I am summarising a few main points here. Internet and wireless and mobile applications are two of the four or five key areas Mittal would be focusing on in India to invest (the others being semi-conductors, healthcare technology etc). Mittal thinks there are still opportunities to develop web 1.0 companies in India since the industry busted in 2000-01 even before India could set up such companies. For instance, we don’t have an Amazon yet. And also look at the frenzy in the online travel marketplace. It’s a clear web 1.0 phenomenon, but now mature enough to exploit the market potential.
Another key point stressed by Mittal was that internet businesses should have a strong mobile component. India, end of the day, is a mobile country with some 100-million plus connections. Broadband connections are still in single digit millions.
I asked Mittal if he would be interested in content companies. He said he would be if the companies had a disproportionate advantage over others in licence acquisitions, and also disproportionate advantage in distribution. But he was not convinced yet since the revenue sharing issues (as for mobile content) still threaten the survival of these companies.
Now how much money he would be putting in a company? Usually $3-5 million in the first round and $10-15 million over the life of a company. There are no such rules, but that is typically the range. They have done seed deals too. Mittal is already sitting with some eight to ten good proposals. “Pipeline is good,” he says. He is likely to make his first investment announcement next month (so keep your fingers crossed).
Download the full interview here. (Roughly 19 minutes; 5.5 MB)