Can you talk about your investment plans in India
In the past few years, most of our investments have had an Indian component. Out of the five deals we have completed so far, two of them had Indian entrepreneurs. So I think, going forward we will continue with the same model. Whether the investments are in the US, North America or Europe there will probably be components that are actually here in India. We are looking at businesses that are based in India.
Are you talking to entrepreneurs based in India
Yes. There is a possibility (of business) and we have got some of those conversations going on right now. But I cannot say when they are likely happen but we are definitely into discussions.
In a consumer-driven economy like India what will be your area of focus Would you be focusing more on consumer-oriented sectors
We would consider investments where it is more customer-oriented. We have been investing in some large-scale systems but what we are doing in the mobile phone area is again more consumer-oriented.
So far most of your investments are in technology-product companies but India is better known for technology-services companies. Does that mean that in India there could be a shift in your focus and you would invest in technology services companies
Yes, it is true that there are good software services companies in India. We should wind up buying in product companies outside India and helping them with (an investment in) service companies here. There is a good base of services companies here and we might put together the pieces that we buy elsewhere (with investments here).
What is the average rate of return on your investments Do you expect a similar kind of return from your investments in India
As of now we have not sold any of the businesses that we bought. On an average, we stay invested for four to five years. Historically, what we have seen in our career as venture capitalists, is that we get normally four to five times return on the invested capital. We do expect a similar kind of return from our investments in India. We would not go and do investments unless we have the similar kind of return profile.
Would you be looking at pipe investments in India
We have actually looked into some of those options. So if we think it is comfortable with the management of the company and we could bring value to the company we would do it. But if it is just capital infusion, we will not be interested. If we feel that there is a technology company where we can bring value to and be on the board and active, we will consider that.
With the Indian stock market at its peak, what kind of valuation you would be looking at for your pipe investments Do you feel that the prices are overheated
We will look selectively. We like situations where the company may be losing money or they would be in trouble. So those will not be the ones that will be at a premium. The companies that are doing well and want capital are not the kind of candidates for us. We will look for companies that are in trouble and need help, maybe a new management, new products. Those companies would be probably selling themselves at discount.
Recent reports suggest that Wyse Technologies is planning to set up a manufacturing unit in Bangalore. Is that true
Wyse is currently doing software development here. But I am not aware of any change that is taking place.