Canaan Partners has just announced the close of its ninth global fund with a $600 million corpus, dubbed the Canaan IX fund. The fund is marginally smaller than the $650 million eighth fund it has raised in 2007. Canaan general partner John Balen is quoted in Fortune as saying that the smaller size is aimed at enabling the Menlo Park, California-based venture capital investor to reduce its investment cycle from four years to three. The fund brings Canaan’s total capital under management to $3.5 billion, said a press release.
In India, the firm has emerged as a significant investor over the past couple of years since it set up direct investment operations here in 2006. It has invested over $150 million here so far, which has come primarily from the $650 million eighth fund. “In Canaan VIII, we have committed about $100 million to companies in India,” Alok Mittal, managing director at Canaan Partners India told StartupCentral via email. Last year, the firm invested approximately $40-50 million, including new and follow-on deals. Its largest deal from the year was a $45 million Series A round in Bangalore-based software services outsourcing firm Happiest Minds, alongside Intel Capital. In all, the firm has invested in 13-odd companies including ecommerce startups Naaptol and MotorExchange and microfinance company Equitas Micro Finance India. With respect to Canaan IX, while the firm does not make specific allocations to any geography, investments in India are expected to continue at its current pace here, says Mittal.
Globally, two-thirds of the new fund will be allocated to investments in digital media, consumer Internet, enterprise, mobile and communications companies in the US, India and Israel. One-third is being earmarked for investments in biopharmaceutical, medical devices and healthcare infrastructure companies, said the release.
Compared to most venture capital investors in India, Canaan’s deal run in India has conformed to a slower pace at 2-3 deals per year. In terms of specific sector themes for investment in the current year, the firm is looking at consumer Internet services, ecommerce, software products and offshore services.
Canaan Partners hosted a breakfast roundtable with over 30 angel investors on December 22 in Mumbai. The objective was to brainstorm on constructive ways in which the potentially large angel community in India can engage better with young entrepreneurs. Alok Mittal, general partner, Canaan Partners, sums up the roundtable. Also check out his thoughts on a potential investment structure for angels at Venturewoods 
