The first wave of Mobile VAS companies offering regular ringtone and music downloads seems to be over.

Venture Capitalists like Canaan Partners, Draper Fisher Juvertson, Helion, Nexus India among others are more interested in innovative product offerings in this space like mobile payment options, advertising, voice-based SMS and satellite video streaming.

According to Venture Intelligence, 2007 saw nine deals ($41 mn) in the mobile VAS space, while the first 9 months of this year have already seen seven deals worth $91 mn. VCs, whom ET spoke to, are bullish on the segment considering the 20 per cent y-o-y growth it has seen. Mobile VAS has a $700 mn market today, which is expected to hit $3 bn by 2012.