Kleiner Perkins’ Passage To India

India, finally is beginning to get attention from Sandhill big wigs. A few months after Norwest VP took the first step and invested in Yatra Online, an online travel site, there is word that Kleiner Perkins and Google backer Ram Shriram of Sherpalo Investors are investing about $3 million in Cleartrip.com, an online travel portal.

Cleartrip is not the only investment KP/Sherpalo are maing in India. They are also investing in Infoedge, which owns some of the bigger Indian properties, such as Naukri.com, 99acres and matrimonial site, Jeevan Sathi. The company did about $10 million in sales and $1.8 million in profits last year. They are in India spreading their wisdom, along with Ray Lane and Ajit Nazre. (Guys get a meal at Bukhara @ Maurya Sheraton in Delhi. Change your perspective on food, forever!)

Okay, lets take the news and analyze it step by step. First of all, one could laud these A-list VCs moving to India as a big step. Still, for an overall economic growth perspective, their impact is smaller versus efforts of other private equity groups, and corporations. I am going to give props to Intel, Cisco and others who saw the strategic opportunity before the VCs did. Their money is going to be better for the overall development of the Indian technology ecosystem. Oak Investment Partners which is rumored to have a fund that is going to invest in Indian retail is likely to create more local jobs than any dot.com.

Regardless, it is nice to see these folks go to India (and China). I remember very-important VCs at some of the top VC funds used to say, “If we can’t drive there, we are not investing there.” That was I guess when making money in the backyard was easy. Fact of the matter is that many US investors can have their companies listed on Bombay Stock Exchange sooner than on Nasdaq. Of course LSE and Australian Stock Exchanges are a way to go as well. The demand for tech-scrips is hot in India and nothing like quick exits.

But on a more deeper level, I wonder if three online travel sites, are one too many for a country where Internet penetration is still pretty small – about 38.5 million. (Details @ Broadband Wiki) The broadband proliferation is proving to be slower than expected, though still growing pretty well. (Westbridge Capital had invested in Travel guru, a company that got about $10 million in early stage funding.) Unless there is a mobile strategy, there is little or no chance that these sites are going to pan out. In India or any other emerging economy, “mobile” is a must-have strategy. From that perspective, Yatra which has backing of #2 telecom operator, Reliance so they are in pretty good shape.

Bonus link: An excellent comparison of India and China.

Bonus link #2: Meanwhile, Vinod Khosla, is busy finding investments in clear energy technologies. Ironic?