Venture Capital Funding for South Asian entrepreneurs drops for the first time since 2002

Annual venture capital funding received by South Asian entrepreneurs in the United States dropped for the first time since the IndUS Business Journal started its annual venture capital report in 2002, according to the 2009 Venture Capital Report released by the IndUS Business Journal.

“South Asian entrepreneurs saw a significant drop in venture capital fundraising from the previous year, raising $1.54 billion in 2008, down from $2.07 billion in 2007,” said Martin Desmarais, editor of the IndUS Business Journal. “The downtrend continues this year, with only $292 million raised in the first six months of 2009 – a far cry from the $1.07 billion raised by South Asian entrepreneurs in the first six months of 2008.”

In 2008, 87 South Asian-run companies raked in venture capital funding, also down from the 130 companies that raised money in 2007. South Asian entrepreneurs raised 5 percent of the total venture capital raised by U.S. companies in 2008. Overall, U.S. companies raised $30.49 billion in venture capital funding in 2008, according to Dow Jones VentureSource, which is published by News Corp. subsidiary Dow Jones & Co. This is a 3.6 percent decrease from the $31.61 billion in venture capital raised by all U.S. companies in 2007.

“The only good news in the South Asian venture capital market in the U.S. has been the average deal size,” said Upendra Mishra, publisher, IndUS Business Journal. “The average deal size for South Asian companies in 2008 w as $17.78 million as compared to an average deal size of $7 million for all U.S. companies.”

The top South Asian venture capital recipients in the 2008 survey include: Range Fuels Inc. of Broomfield, Colo., with $166 million; SunEdison LLC of Beltsville, Md., with $131 million; Achronix Semiconductor Corp. of San Jose, Calif., with $52 million; Soma Networks Inc. of San Francisco, with $51 million; and Suniva Inc. of Atlanta, with $50 million.

The top-five states for venture capital raised by South Asian companies in 2008 are California, with 50 companies raising $776.97 million; Colorado, with one company raising $166 million; Maryland with one company raising $131 million; Massachusetts with nine companies raising $130.75 million; and Texas with seven companies raising $71.65 million.