VCs trust Indians in US the most

By siliconindia staff writer   |   Monday, 12 April 2004, 19:30 IST
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CHENNAI: Indians continue to be the darling of venture capitalists in the US. They have pumped a whopping $474 million during the last quarter into the technology companies promoted by the Indians in the US, reports Economic Times. Hi-tech firms like CipherTrust, 3PAR, Redback Networks, Ipolicy Networks and Maranti Networks dominated the fund raising through private equity placements. Of the 43 such companies which raised money in the quarter ended March 2004, 19 were able to attract at least $10 million each, according to data compiled by TSJ Media, which tracks venture capital and M&A activity involving Indian-founded companies worldwide. During the previous quarter (October-December 2003), 32 Indian companies together raised over $267 million. The enterprise software products sector continue be the favourite bet for VCs. This sector has attracted the most of number investment deals for the third quarter in a row, with 15 deals in the last quarter, said the TSJ Media report. The software sector was followed by the communications hardware sector with eight investments. The storage hardware and security devices companies were tied in third position with four investments each. The largest funding of $42 million was pulled off by the Jay Chaudhry-founded CipherTrust, an Atlanta, GA-based provider of enterprise email security appliances. In this second round of funding for CipherTrust, VCs like Greylock and Battery Ventures, US Venture Partners, Noro-Moseley Partners and Silicon Valley Bank participated. The second largest deal was the $32 million raised by 3PAR co-founded by Ashok Singhal. This is fourth round of funding for 3PAR, which is a CA-based provider of utility storage solutions. It was followed by the Gaurave Garg co-founded Redback Networks, a broadband networking systems provider that has just emerged out of Chapter 11 bankruptcy with a $30 million funding from Technology Crossover Ventures. Indians have also played their part in the M&A space in the US. The Vivek Raghavan co-founded Mojave, Inc., a California-based developer of technology for IC manufacturability and verification, was acquired by Nasdaq-listed chip design firm Magma Design Automation. By this cash-cum stock deal, Mojave shareholders will receive an upfront payment of $25 million. Magma will make additional periodic payments over a period ending March 31, 2009 and potentially totalling $115 million contingent on the meeting of certain milestones. The Rajeev Bharadhwaj co-founded Ejasent, Inc. was acquired by Nasdaq-listed Veritas Software for $59 million in cash. The Shankar Mukherjee-founded TeraBlaze, a developer of Gigabit Ethernet switching solutions, was bought over by Agere Systems, a NYSE-listed semiconductor company, for $21 million. Raju Chekuri has sold his Velio Communications, which provides semiconductor solutions for telecom, storage, and enterprise networking applications, to the NYSE-listed LSI Logic for about $20 million in cash.