VentureBeat

The Mercury News is running a notable series about the return to India by Silicon Valley entrepreneurs as venture capitalists. It gives you a taste of the “India rising” excitement, but also of the country’s daunting cultural, social and infrastructure challenges.

It features Vani Kola, who returned this summer to begin investing a new fund into Indian start-ups, NEA IndoUS Ventures (size targeted initially at $105 million), which we mentioned earlier here. It also features Rahul Khanna, pictured below, director of Clearstone Venture Advisors, who returned last year to invest a $205 million India fund, and Bob Kondamoori, pictured bottom, who is reportedly launching a $100 million India fund, Sandalwood Partners.

The key stat: VCs have invested $355 million during the first nine months of 2006, nearly twice as much as the two previous years combined.

The story says dozens of funds — “anywhere from 24 to 44, depending on who’s counting” — are being created to focus on the India market, but gives no source for this. It also cites Kola saying that Indian laws “favor the founders, not the investors,” but gives no explanation. We’ve contacted author John Boudreau to clarify. (Meanwhile, if any of you have any insights on this, we’d like to hear from you in comments below).

There are a few more stories in the series to come; we’ll update this post as necessary.

Meanwhile, there’s a good set of slideshows here, though you’ll have to play with tabs a bit to get to it all. It’s a nice presentation of the voices of the VCs as they talk about their experiences.

There’s a good list of some of the U.S firms that have entered China so far, with more details here:
• CANAAN PARTNERS
• CLEARSTONE VENTURE ADVISORS
• DRAPER FISHER JURVETSON
• KLEINER, PERKINS, CAUFIELD & BYERS
• MATRIX PARTNERS
• SEQUOIA CAPITAL

Separate from this series, we’re not sure how accurate this reference to a recent poll result is, i.e., that Bill Gates displaced Mahatma Gandhi as the most respected person among Indians, but it is notable that the question is even being asked.

The most recent investment came Friday, when Matrix Partners India announced an investment of $5.4 million into Yo! China, India’s largest Chinese fast-food chain. We’ve mentioned Matrix India’s $150 million fund here.

(Photos all courtesy of Meri Simon, Mercury News)

Newsweek has a good story about how big-name Silicon Valley venture capital firm Kleiner Perkins fell for clean tech.

It took several steps, but the ironic obsession by new partner Bill Joy with his $50 million 190-foot superyacht is what put it into high-gear:

…Joy was already deeply interested in alternative energy, ironically thanks to an indulgence of the über-wealthy. Since 2004, he has spent tens of millions to build what he describes as the world’s most environmentally friendly sailboat: a 190-foot superyacht, to be named Ethereal when it’s finished in 2008. As part of the boat’s design process, Joy had been rethinking nearly every aspect of energy generation and efficiency. At KP, Joy developed a taxonomy of 65 investment categories and ranked each red, yellow or green…

Another catalyst was India-born mechanical engineer KR Sridhar, whose initial project was to convert solar-generated electricity into air, water and methane and to grow a living plant inside a tent on Mars. But NASA canned Sridhar’s project, so he approached Kleiner with a new idea: Reverse his electrolyzer technology into a fuel cell — using water, oxygen and a hydrogen source such as natural gas to cleanly generate electricity.

The company became Ion America, since renamed to Bloom Energy (The company finally has a Web site, but still reveals little).

Ram Shriram, the guy who invested early in Google and made at least a billion, has in part switched his attention to Indian investment possibilities.

Now he’s decrying the dearth of skills there.

Surprising, given all the hand-wringing and publicity in the U.S. in recent years about the never ending supply of talented labor there.

First comes this story from the NYT, which cited studies saying that only one in four engineering graduates in India are employable, due to lack of required technical skills, fluency in English or ability to work in a team or deliver basic oral presentations.

And Shriram, in a recent talk here in the valley, noted a shortage of middle management and of engineers with the latest Web development skills, such as knowledge of Javascript and AJAX:

“The people are smart, innately smart but don’t have this particular skill set yet,” said Shriram, an Indian native who is a founding member of Google’s board of directors.

It’s been really hard to find middle management, for example. It’s great to find a good founding team, but then I can’t find middle management. I can’t find engineers.”