VC Interest growing in the Consumer Internet space in India
Promod Haque, the managing partner of Norwest Venture Partners, recently in an interview with Hindustan Times talked about the Consumer Internet Space in India. By the way Promod Haque was ranked the Number 1 VC by Forbes in 2004.
Here’s the excerpt from his interview:
The Indian internet landscape is exactly where the Chinese market was five years ago — A burgeoning middle class, an aggressive broadband rollout, incremental increase in PC and mobile penetration. So the time is ripe for venture capital to flow back into portals and online businesses that have a proven business model. We are also armed with more experience to recognise a rogue company when we see one. It is matter of evolution, the Indian market is just right for the consumer internet space and that is why we decided to join hands with Reliance and TV18 for Yatra. We expect to close a few more deals in the next couple of months.
Indian Portals are booming right now as both, Nasdaq listed, Sify Ltd. and Rediff.com India Limited are on a roll right now. The growth is going to continue as the user base doubles in the next couple of years. With the India Internet sector evolving and maturing, adverstising revenue will continue to grow and attract interest in local portals by the big players like Yahoo and Google.
Sify Ltd. (NASDAQ: SIFY) is obviously a buy right now as they will be declaring profits this quarter when they release their 4Q earnings. Rediff.com India Limited (NASDAQ: REDF), although a good long term play, is very speculative right now. It’s market cap is not justfied at this price point. Rediff.com will be good buy in the teens. Either way the future is bright for both companies.