Google to Fund Indian Startups

Read this one from Red Herring and the news is definitely the result of the booming Indian economy.

As per the report, Google,The Mountain View, California-based search engine giant is contributing an undisclosed amount to Seedfund, a $10-million to $15-million fund that had its first closing in November 2006, according to sources.

An excerpt from the story:

The Google decision may be unusual for the company, but it’s a smart option at this point in India. Google has its own R&D team in India to offer local systems for the emerging market, but their success depends upon how rapidly and effectively they are adopted.

The reality is that India’s Internet market is not yet mature, with only 40 million users going online by the end of 2006, according to the Internet and Mobile Association of India.

Seedfund managing partners Mr. Gandhi and Bharati Jacob have run Infinity Ventures, a profitable early-stage fund when the term was not fashionable in India. Another partner, Mahesh Murthy, is a successful entrepreneur and venture
capitalist.

“At the seed stage, teams with big ideas need less money and more mentoring from people who have an entrepreneurial background,” Mr. Murthy said when the fund launched just two months ago. Given the names who have invested in his fund, he seems to be on the right track.

Mobile phone subscribers now number 150 million, but average revenue per user is still low at about $5 per month. Startups targeting either market are still not quite as mature as the companies in which Google typically invests.

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