VC interest in Indian-owned US firms refuses to fade

Mumbai, Feb 1 | Updated: Feb 2 2006, 05:34am hrs
Private equity and venture capital firms invested about $1.5 billion in 125 Indian-founded companies in the US in 2005. Of these, 63 companies closed rounds of over $10 million. The previous year had witnessed 129 such companies raising $1.6 billion. These are the findings of a study by Venture Intelligence, a firm tracking investments in Indian companies in India and abroad.

The largest single investment during 2005 was the $150 million raised by Harpinder Madan-co-founded FiberTower, a San Francisco, CA-based provider of infrastructure and services for cellular networks. The latest round, which takes FiberTowers total financing to $225 million, was led by existing investor Crown Castle International with participation from other existing investors.

Other Indian-founded companies that raised over $30 million in venture capital financing during the year included Paul Sekhri-co-founded Cerimon Pharmaceuticals, Rakesh Gupta and Anita Gupta-co-founded TechBooks and Prabhat K Dubey-co-founded Force10 Networks, amongst others.

Over 30 Indian-founded companies in the US were acquired during 2005, six of them for over $100 million. The single largest deal was the April acquisition of Ajay Chopra-co-founded Pinnacle Systems by Nasdaq-listed Avid Technology for $462 million.

INDIANS EVERYWHERE

Private equity and venture capital firms invested about $1.5 bn in 125 Indian-founded companies in the US in 2005
The largest single investment during 2005 was the $150 m raised by Fiber Tower

Networking equipment giant Cisco Systems acquired five Indian-founded companies for almost $700 million during 2005, the study revealed. Ajay Mishra-co-founded Airespace, a San Jose, CA-based provider of enterprise wireless LAN products, was acquired by Cisco Systems for about $450 million in February.

Founded in 2001, Airespace had raised $58 million from Battery Ventures, Fidelity Ventures, Norwest Venture Partners, Storm Ventures, Hotung Capital and KTB Ventures. Ciscos shopping list also included Sheer Networks, FineGround Networks, NetSift and Nemo Systems.