IT-backed VCs ramp up India operation
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Mumbai: India is now witnessing a rise in corporate venture capital funds backed by technology focused VC firms. Technology majors like Intel, SAP, Cisco and Qualcomm are pumping up investments through their VC arms to various areas of IT. A report by Venture Intelligence finds that 10 investments have been made by corporate VCs this year, in which Intel Capital, the VC arm of Intel leads the way with investment in six Indian Technology firms. "We are not bothered about raising funds as it is a part of Intel. However, that does not mean that our work becomes any easier as we still compete with many other VCs. Our target has been to close at least 12 or 24 deals per year. For the next 12 months, we are looking for higher activity in India," said Sudheer Kuppam, Managing Director, India, Japan, Australasia and South-East Asia, Intel Capital. Analysts are of the opinion that presence of experienced VCs like Intel Capital and the entry of new players like SAP Ventures and Cisco is not only acknowledging the presence of India as a contributor to technology innovation, but also recognizing it as a mature market. "The Indian economy is growing and we foresee similar growth for the next 15-20 years. Due to this growth, there will be investment opportunities for the next couple of decades," said Jai Das, partner, SAP Ventures. He also mentioned that Indian enterprises and consumers are using, and are dependent on, technology. These technology needs will not be met only by companies from the U.S. or Europe. "Indian companies are now able to expand their focus on new geographies with characteristics similar to those of India. Some of these Indian companies are rapidly becoming market leaders in West Asia, Africa, Latin America, Emerging Europe, which enable us to back global companies like we do in the U.S.," he added. Arun Natarajan, CEO, Venture Intelligence said, "This year, we have seen Intel Capital and SAP Ventures doing deals, in which they are the sole investors. One of the reasons for this could be the fact that the types of investments these firms are looking for (in terms of sector and stage of company development) might be diverging from those of the financial VCs." He also believes that corporate VCs have an edge in their ability to make business introductions within the parent firm as well its customers and suppliers. Apart from that, it is their ability to remain invested for a longer period of time since they do not have pressure to exit an investment in a fixed time-frame like financial VCs. So far, Intel has invested in 43 Indian technology firms while Cisco has 11 companies in its list.

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