Intel Capital, the funding arm of the American chipmaker, invested $56 million in 17 deals in India last year, its best performance in a single year so far. Sudheer Kumar Kuppam, Intel Capital?s managing director for Asia Pacific tells FE?s Ajay Sukumaran that the firm would continue to close deals on its own this year but large investments in which they typically partner with other venture capital funds may likely slow down, a reflection of the general sentiment in the industry. Besides, he?s hopeful a couple of potential initial public offerings may help boost things in a slow year. Excerpts:

Are you seeing a lot more Indian start-ups getting into the technology space?

Last year was one of our most active venture capital (VC) years, we had a record $56 million invested in 17 deals. We also saw a similar trend in the overall industry. A lot of VC money got invested last year in various sectors within the technology space, so we believe that obviously we are on an uptrend as far as deal activity is concerned.

But this year the first quarter has been a bit slow, part of the reason being a lot of the investors are taking a back seat.

Coming off a year that?s been really good, how would you expect to close this year?

Well, we had a good start, at least if not on the investment side, on the liquidity aspect. We had the MCX initial public offering from our portfolio which was pretty good and we have at least three to four other opportunities where our portfolio companies could potentially get listed either in India or in the US. So that way, from a liquidity standpoint, it is looking very good.

From the investment side, given the fact that we always co-invest with other VCs, obviously if the industry is slowing down and they are not willing to write the cheques, then naturally that will slow down the deal flow. Right now, we started off with a real slowdown in the industry so we need to see if there will be any pick up. So for us to end the year on a more positive note, we need to see some reasonable momentum coming back to the VC industry.

Will there be exits this year?

Having an IPO is just a liquidity event. Any liquidity event is called an exit in the VC lingo. So, if you are asking if we would sell from those IPOs, I don?t think so. It all depends on what?s the valuation, what?s the stage of the business, where are they in terms of growth rate. For us, having those liquidity events is a big boost. It basically shows the potential for investors into the venture fund.

What is your long term road map in India?

In India, in the long run we would expect our investments to enable India to surpass 300 million broadband users, which basically means several hundred million PC users that would help Intel architecture grow in India. Today, we are investing from our $250-million Intel Capital India Technology Fund that we announced on December 2005. About 80% of that fund is invested and we still have lot of dry powder from that fund. We continue to invest out of that.

Is there a timeline you are looking at for the fund?

It?s unpredictable. If I had another record year like last year, I?ll be done this year. But right now, I don?t know where we?ll end up. But we have enough dry powder to look at innovations coming out of Indian entrepreneurs.