Intel to finance tech start-ups in India
By siliconindia staff writer   |   Friday, 15 October 2004, 19:30 IST
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KOLKATA: Intel Capital, the venture capital arm of US chipmaker Intel Corporation, will work closely with US VC firms like JumpStartUp and Westbridge Capital Partners to invest and lend management support to pure technology domestic start-ups with a possible front-end presence in the US. Intel’s strategic initiative aims to shore-up equity infusions in local start-ups by Indo-US corridor VCs running a host of technology venture funds. Intel’s decision to network with other US VC firms in India comes at a time when Intel Capital’s total investment corpus for ’04 is likely to exceed the $700m invested in Circa ’03. Nearly 50% of Intel Capital’s annual ’04 investment corpus is tipped to flow into companies outside the US in Intel’s fastest growing emerging markets — Mexico, India, China, Russia and Brazil. Intel Capital’s director (strategic investments-South Asia), Kumar Shiralagi, told ET in Bangalore on Wednesday, “Over 40% of Intel Capital’s total $700m equity infusion in ’03 was made in companies outside the US.” That number is likely to rise in ’04. To start with, Intel Capital is about to home-in on a bunch of little known local technology start-ups involved in software product development work that complement the US chip-maker’s brand new WiMAX wireless technologies initiative. Intel claims its new line of chips based on WiMAX technology enables delivery of high-speed wireless internet access across 50 km at one-tenth the cost of providing connectivity by rolling out optical fibre cable over the same distance. WiMAX is suitable for markets like India to provide low-cost wireless data connectivity across rural areas and small towns. “Intel Capital is networking with US VCs like Westbridge Capital and JumpStartUp to offer both equity and management support to a clutch of pure technology start-ups operating in India. Since some of the companies identified are early stage entities, Intel will welcome equity participation from other US venture firms to help install managements in these technology start-ups,” Mr Shiralagi said. Elaborating, he said: “Since Intel Capital has non-disclosure agreements in place, it is unable to name the companies that have been identified for equity infusion in 2004. But Intel will make sizeable investments in Indian pure-technology start-ups that support Intel’s new WiMax initiative to offer Internet access across small towns at one-tenth the rates being charged by telecom service providers and cable companies.” Besides pure technology companies, Intel Capital will also pick up stakes in Indian start-ups that are into education software, gaming, e-governance solutions and broadband as part of its IT market development-related investment exercise in key emerging markets like India.

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