Canaan opens doors in India

Canaan Partners opened an office in Gurgaon, India, as the 19-year-old venture firm looks to invest more in the country. Menlo Park, Calif.-based Canaan has hired Alok Mittal to head its Indian operations as an executive director.

The firm, which has been investing in India since 2000, focuses on startups in the Internet and wireless sectors. The firm expects to announce several investments in Indian companies in the months ahead.

“Canaan has already reviewed about 40 business plans, about half of which are getting additional scrutiny,” Mittal said, according to the online news site

Mittal co-founded Indian job-posting site, which raised $2.5 million from ChrysCapital and was sold to (Nasdaq: MNST) for $9 million in May 2004. He also helped launch an investing group called the Band of Angels India.

Canaan is one of many firms that have decided to move into India during 2006. Draper Fisher Jurvetson started interviewing for Indian affiliates recently; Sequoia Capital subsumed prominent Indian VC firm Westbridge Capital in May; and Norwest Venture Partners in April closed on a $400 million fund, its largest fund to date, with an eye toward the subcontinent. Also, IDG Ventures plans to raise a $150 million India fund by the end of the year.

Meanwhile, venture capital and private equity investments topped $1.4 billion in India during the first quarter, more than triple the level during the same period last year, according to a study by Venture Intelligence India

“Well I guess India’s pretty hot, as you’ve probably heard,” says Canaan General Partner Deepak Kamra.

Kamra has been leading the Canaan effort in India and will continue to make the multiple time zone trips overseas to visit his portfolio companies and help Mittal evaluate deals.

Kamra has already helped shepherd one of the firm’s startups to a public offering on the Bombay exchange. Aztec Software and Technology Services (BSE:AZTEC) went public in 2001 and has tripled in price during the last five years.

“We think Bombay is a good place to take something public,” Kamra says. “But they have rules, like you need to have three years of profitability before you can go public, for example.”

Canaan also hired Krishnan Nandalban of BioXcel to consult its life science startups on how to approach India as a potential market and as an outsourced developer.

The India office follows another Canaan overseas investment office that opened during the winter near Tel Aviv, Israel. —Alexander Haislip