$2 bn VC funds in IT sector next year

New Delhi, Sept 20: Internet companies may be down in the dumps these days, at least as far as public perception is concerned, they’ve got a lot to look forward to. According to Shujaat Khan, director of one of the more visible venture capital (VC) firms operating in India, Chrysalis Capital, the total funds inflow from VCs is likely to double next year. From around $ 1 bn this year, Khan said at a NASSCOM seminar today, the total VC inflows next year could be as high as $ 2 bn from as many as 40 to 50 active funds. Considering that VC funds last year were just around $100 mn, that’s a huge step up, and a potential gold mine for potential start-ups.

Chrysalis has a fund of $65 million, and has already invested around $30 mn of it. Khan said, however, that once this ran out, Chrysalis saw no problem in raising more funds as and when they required them. Khan added that the public perception of internet firms notwithstanding, the internet firms they’s invested in — like e-gurucool.com and planetcustomer.com — were doing very well.

Yesterday, various speakers at the NASSCOM conference spoke of how there was a $17 bn market for IT-enabled services — like, say call centres, remote back office computing, e-learning, etc — by the year 2008. Today, Khan went one better, and argued that the cost effectiveness of India was so high that it should be looking at a $380 bn global marketing for outsourcing of IT-enabled services.