Japan is the Venture Capitalist's hot favourite in the Asia Pacific region, having received $1.8 billion in disbursements across 39 companies.

Coming up second, is India, with disbursement of $1.1 billion across 91 companies during 2001. South Korea ranks third, followed by Singapore, Australia, China and Hong Kong.

India's disbursements were marginally lower in 2001 ($1.1 billion) compared to the previous year's $1.3 billion, but the situation is expected to brighten up this year with projections of $2 billion according to NASSCOM's annual strategic review of the Indian IT industry. Expecting fresh India-centric capital in the region of $1 billion to be raised this year, Bangalore-based Walden India's CEO, Sudhir Sethi says, 'With the outlook for 2002 already looking positive, fund raising for India-centric funds would increase significantly, driven by an increased European interest'.

According to the findings of the review, the pattern of VC disbursements last year indicate a preference for late-stage funding. Seed funding accounted for only 15 percent of the total disbursement, while late-stage funding constituted 41 percent. There has also been a significant shift to non-internet investments, with the share in this segment increasing to 68 percent in 2001 as against 28 percent in 2000. VC's have also moved to longer gestation investments such as health and biotechnology, IT-enabled services and wireless applications.

The Indian Venture Capital Assn (IVCA) states that India's venture capital pool (i.e. the total quantum of committed investment), has grown over ten-fold from $281 million in 1995 to $2.9 billion at the end of 2001. NASSCOM President, Kiran Karnik says, 'The trend in VC investments in 2001 has been reflective of a focussed approach to identifying gaps within their portfolios and filling those gaps with stable investments'.

Source: The Economic Times