"With 14 deals worth about $87 million, the Information Technology and IT-Enabled Services industry retained its status as the overwhelming favourite among VC investors during Q1 '08," according to a latest report by research firm Venture Intelligence Service.
During the quarter, venture capital firms have invested $144 million through 21 deals, a sharp decline compared to the corresponding period previous year which had recorded 28 deals worth $173 million.
The maximum VC investment was attracted by online travel portal Cleartrip.com of about $18.5 million from DAG Ventures.
Further, Deeya Energy attracted ($15 million) investment from New Enterprise Association, Soham Renewable Energy ($15 million) from D E Shaw and Ikya Human Capital ($8 million) from India Equity Partners.
However, there has been a significant growth in terms of the deal size of the investments.
"Online Services companies dominated the quarter accounting for a 75 per cent share of the invested capital," Venture Intelligence CEO Arun Natarajan said.
"About 10 out of 21 deals during the quarter came within the range of $5 to $10 million," Natarajan said. The same stood at six out of 28 deals within the range of $2 to $5 million.
During the quarter, investors favoured online services companies targeting various online verticals including travel (Cleartrip and Ixigo), Classifieds (Kijiji India), e-commerce (FutureBazaar) and Education (StudyPlaces) and e-cards (123Greetings.com) the report said.
Further, about 62 per cent of VC investments during Q1'08 were in the early stage segments, or in companies which were less than five years in the business and is not part of the larger business group, the research said.
The research also noted that the initial public offer of telecom services provider OnMobile was backed by VC firms.
"The only VC-backed IPO this year was that of OnMobile Global which attracted investment from the US-based Argo Global," Natarajan added.
The total number of VC-backed IPO in the Jan-Mar quarter in 2007 was the 100 million dollars IPO of BPO services firm Firstsource.