<article>At a time when venture capital firms have slowed their pace of investments, they are still shoring up capital.</article>

At a time when venture capital firms have slowed their pace of investments, they are still shoring up capital.
According to a Times of India <a style="color: #000080;" href="http://timesofindia.indiatimes.com/tech/tech-news/Top-6-VCs-refuel-with-2-5bn-in-a-year-despite-few-exits/articleshow/52069000.cms">report</a>, the top six venture capital funds in India have, in the past one year, amassed as much as $2.5 billion to be invested into the India startup ecosystem, hinting that sluggishness in deal activity is temporary.
The latest in the funding race is<a style="color: #000080;" href="http://dealstreetasia.com/tag/accel"> Accel</a>, one of the most prolific venture investors in the country that is also an early investor in e-commerce unicorn Flipkart. According to the Times of India report, Accel is in the process of raising $400-500 million for its fifth India-focused fund, which is expected to close by the year-end.
Last year, while <a style="color: #000080;" href="http://dealstreetasia.com/tag/nexus-partners">Nexus Partners</a> raised $450 million, <a style="color: #000080;" href="http://dealstreetasia.com/tag/saif-partners">SAIF Partners</a> brought in $350 million in funding. Accel also raised $305 million, while <a style="color: #000080;" href="http://dealstreetasia.com/tag/kalaari">Kalaari</a> and <a style="color: #000080;" href="http://dealstreetasia.com/tag/lightspeed-partners">Lightspeed Partners</a> got $285 and $135 million respectively. The biggest of these and most recent was the $920 million fund by Sequoia Capital.
According to the Times of India report <a style="color: #000080;" href="http://dealstreetasia.com/tag/matrix-partners">Matrix Partners</a>, which recently topped up its $300-million India fund by $110 million,  will raise its third India fund of around $300-400 million after a year.
&#8220;One of the things is that over the last two-three years many of the VCs raised closed to $3 billion as India-specific funds, so it’s not like suddenly they will take that money and disappear, that money will be deployed, might take a little longer and valuations may go done, but the people are here to stay,&#8221; Anupam Mittal, Founder and CEO of People Group had told DEALSTREETASIA in an interview.
&#8220;They understand the long term potential of India, so I don’t think there is any kind of dry up as far as investment is concerned,&#8221; he added.
While these funds have bulked up with billions of dollars in dry powder for India investments, exits remain imperceptible for most VCs here.
&#8220;The lack of exits for investors in India is a symptom of the problem. The real problem so far was the lack of depth in the market. So a lot of money was invested without a deep enough market opportunity. However, looking out at the next ten years, investors in the VC asset class in India realize the market depth has arrived and exits shall follow. So one has to look forward, else it will be a rear-view mirror-based decision,&#8221; says Avnish Bajaj, MD at Matrix Venture Partners, an investor in transportation app Ola and online classifieds firm Quikr told Times of India.
According to data compiled by London-based Preqin the first quarter of 2016 has been tough but not terrible for Indian startups that have continued to attract early and growth capital. Data shows the total value of venture capital deals concluded during the January-March quarter at $1.6 billion, up 47% from the fourth quarter of 2015 owing to a few large deals. These included a $180 million round by MakeMyTrip, a $145 million investment round in auto classifieds platform CarTrade, a $200 million investment led by Canadian pension fund Ontario Teachers’ Pension Plan in Snapdeal and $150 million by grocery e-tailer BigBasket.
At the angel and seed stages, investors closed 146 deals worth $35 million. That represents a 46% drop in value terms when compared to the fourth quarter of 2015, even though the volume of deals grew 5%.
During the first three months of 2016, venture capitalists closed 33 early deals worth $172 million at the Series A through C stages. That’s a 19.5% decline in terms of volume and a bruising 57.5% decline in value terms compared to the October-December 2015 quarter. The big casualties are the Series B and C stages.
The slower pace of investments at the Series B and C stages indicates that the valuations at later stage investments are still a matter to concern for venture capitalists.
Also Read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/29331-29331/">Sequoia Capital raises massive $920m new fund for India</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/venture-capital-investors-in-no-hurry-to-deploy-funds-36777/">India: VC investors in no hurry to deploy funds</a>
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At a time when venture capital firms have slowed their pace of investments, they are still shoring up capital.

Top 6 Indian VCs amass $2.5b dry powder, Accel mulls $500m round

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