US and European venture firms have shown their appetite for online social networking sites targeting their home markets, such as Facebook in the US and Bebo in the UK. However, these VCs’ interest in sites that target overseas markets are starting to pick up as well.
India is a prime example. Just yesterday, US bicoastal venture firm Canaan Partners announced that it, along with Yahoo! Inc., has invested in the $8.6 million (€6.7 million) series A financing of Indian online matrimonial service BharatMatrimony Group.
Canaan cut its teeth on the online networking business over a decade ago as the first investor in Match.com, the first online dating service established in the United States. Last year, Match.com reaped $250 million in revenues.
“Canaan Partners was there in the early days of social networking on the Internet with Match.com, and we’re capitalising on the same kind of opportunity today in India,” said Canaan general partner Deepak Kamra in yesterday’s press statement. “India has a huge population of 1.1 billion, and the most important thing there is love and marriage. We saw pretty much the same thing at Match.com and we’re seeing it again at BharatMatrimony.”
“Dating is not a widely accepted custom for most Indians,” noted Alok Mittal, the executive director for Canaan’s two-month-old India office. “But marriage is extremely important, and we want to help as many brides and grooms get together as possible.”
Another VC active in India’s online matchmaking space is WestBridge Capital Partners, which funnelled $8 million into matrimonial services site Shaadi.com in March of this year. Other types of social networking sites have been gaining momentum within the Indian market as well, including Sixer – an Indian social networking site for cricket fans – which received an investment earlier this year from Linus Capital, a venture firm based in the San Francisco area.
According to Kamra, India’s Internet market – in terms of penetration – is much lower than the US or China, and presents a significant constraint to the use of social networking sites in India.
“Now, the Internet in India is more transactional in nature,” said Kamra in a conversation with PEO. He added that even BharatMatrimony, although the site may seem like a social network, is still transactional in nature.
However, Kamra expects that this dynamic will change, particularly as access to broadband increases in India in the next few years. And as the Internet infrastructure in India grows over the upcoming years, social networking portals such as BharatMatrimony and Shaadi.com will likely become much more accessible – and popular – for potential users.
With the Indian online networking industry presently in its adolescence, how well VCs and social networking sites in India match up still remains to be seen. But if the experience in the US and China is any indication, these could well prove to be matches made in heaven.