Eating into VC’s pie

Font Size

Print

Feedback

Email

Discuss

Related Articles

Indian CIOs more progressive than global peers: IB...Nokia unveils N97 miniIBM partners with NGOs for its CSC programHP acquires IBRIX

: What is common to Rediff.com, India Infoline, 123 greetings, Subex, Makemytrip and Bharti Telesoft? Their growth, at some stage or the other, has been funded by a global IT major.

Venture capital arms of global IT corporate bigwigs might form a small part of the VC funding flowing into the country, but they are clearly leaving a mark on the Indian tech landscape. And many more are joining pioneers like Intel, Cisco and Microsoft. Euro 10 billion ERP major SAP is the latest to join the bandwagon with its SAP Ventures.

Investment and merchant banking circles in India are buzzing with news that many more will follow in the next two to three years. “Having made India a laboratory of innovation, companies like SAP are now encouraging innovation by launching these funds,” explains Forrester Research vice-president, Navi Radjou.

At the same time, funding patterns could change too. Post 2008, IT majors like Google, SAP and Yahoo will fund those companies whose products and applications are in sync with their global strategic interest, predicts Siddhartha Padam, principal in the Chesapeake Group (invesment and merchant banking).

“Though tech majors funding Indian start-ups is not a new phenomenon, we expect funding will no more cut across technologies and applications; we will see focused investments dedicated to applications specific funding in the next few years,” he adds.

Intel Capital’s portfolio of funding is a case in point. From Rediff.com to India Infoline and 123greetings.com, its venture arm has funded a wide spectrum of tech start-ups.

“Earlier, the broad strategy was to develop internet and its related applications. Now corporate venture capitals like SAP will be more interested in associating with enterprise applications,” Padam says.

Tech venture funds like Intel Capital, Acer Technology Ventures and Cisco Ventures are obviously looking to tap into the vast talent pool of India that saw the rise of outsourcing to India. Arvind Kajaria, head of Intrasoft Technologies, a company funded by Intel Capital in December 2007, feels that the availability of large number of skilled people is one of the reasons of attraction of the corporate ventures to the Indian market.

123greetings targets the US market and Kajaria says that Intel Capital Association has helped him with references, associations and technology.