As the tides of investments change over time, venture capital funds are shifting their focus to businesses related to consumer demand such as education, media and entertainment, food & beverages and alternative energy. This focus assumes significance as it was till six months ago that technology was the prime investment target of VC funds.

Recently, Matrix Partners India invested $7 million in pre-school educator Tree House Education and Accessories and Helion Venture Partners invested $4 million in Humming Bird Suites, a Bangalore-based service apartment operator.

"We are looking at India-focused consumer demand-related businesses such as retail services, education and financial services along with internet, mobile and outsourcing," said Helion Partners CEO Kanwaljit Singh.

Clearstone Venture Capital has so far invested in logistics, games and payment and management solutions. Rahul Khanna, head of Clearstone VC, said that non-tech firms such as service providers have the same underlying outcomes as tech companies.

"Here one has more freedom to change the vertical as the company's performance is known in six months, whereas tech companies start showing results in two years," he added.

Nexus India Capital, whose core area of investment was technology, has invested in farming company Suminter India Organics, which focuses on organic produce for textile and food industries. Sandip Singhal, one of the team members, said it will continue to focus on other areas as well from its new fund. Nexus India Capital has recently raised $220 million.

According to Arun Natarajan, CEO and Founder of Venture Intelligence, the VC industry is looking for people with expertise of particular sectors as the industry is expanding. Earlier 90 per cent of the total fund was invested in technology, which has now come down to 70 per cent.

VC funds are raising more funds and entering into newer deals. Despite the slowdown in the economy, the industry has made 20-25 investments in each quarter.

But there are some such as IDG Ventures and Walden, which still want to walk down the tested-path and stay focussed on technology. "We will continue to invest in technology only, though there are opportunities in other sectors," said Sudhir Sethi, chairman and managing director of IDG Ventures. Similarly, Rajiv Subhramanyam said that Walden is evaluating opportunities for investment, although so far it has only invested in areas such as IT and high-end tech products.