Venture capitalists raising new funds dedicated to the Indian market are not finding the going tough despite a global slowdown impacting availability of capital.

For instance, Clearstone Venture Advisors, a global venture capital fund with over $650 million of committed capital for investment globally, plans to close its fourth fund soon. The fund, which could be over $200 million, will also have a larger share of investments in India. The company had raised $210 million for its third fund, of which 20 to 25 per cent was dedicated for investments in India.

Similarly, Seed Fund, which invests in early start-ups, is in the process of raising its second fund. The fund, which will be in the range of $50-60 million, will be closed by the end of this year.

"It all depends on who is raising the funds. Firms like us who invest in early- stage companies will be least impacted as we are not looking at immediate gains," said Pravin Gandhi, Partner, Seed Fund.

The strong India story is probably the reason why several funds are strengthening their India focus. These include names such as Walden International and Accel India Venture Fund.

Walden International recently announced its plans to raise a $500 million global fund early next year to step up its investment in China and India. Over the next 12-18 months, the global VC fund will invest close to $150 million (around Rs 650 crore) in India.

Mohit Bhatnagar, operating partner at Sequoia Capital, said the firm has not seen any major drop in either the investments or the pipeline of deals they examine. A lot of good companies get started globally during economic downturns and India should be no different. Of course, deals might take longer to close accounting for valuation corrections, different exit strategies, etc., says Bhatnagar.

Not everyone is bullish on the future as some VCs said the subsequent rounds of funding will get impacted.

VCs raising follow-on funds are not facing the problem as much as those raising funds for the first time, points out Arun Natarajan, founder and CEO, Venture Intelligence. According to Venture Intelligence data, during the first six months of 2008, VCs invested $380 million across 60 deals.

This compares with $379 million spread across 59 investments during corresponding period in 2007. VCs invested $760 million across 125 investments during whole of 2007.

Seed Fund's Gandhi said most investors are cautious, hence the appetite for investment will slow down.

Many also feel that India as a market was too hyped-up for investment and many went overboard with regard to valuations.

Avnish Bajaj, co-founder and MD, Matrix India, said some of the global funds coming to India will be impacted, especially where the fund did not have an India-dedicated team who could bring in local expertise.