Processing .....please wait.. 
The article has been forwarded.... 
VCs,PEs eye on IT product makers
By siliconindia
|
Thursday, 19 August 2010, 19:09 IST
Mumbai: Venture capitalists and private equity firms are now looking at IT product companies for investments. Recently, Sequoia Capital had invested in Quick Heal Technologies. In a growth-stage funding, the private equity firm, which manages funds capitalised at close $1.8 billion across investment stages in the country, acquired an undisclosed stake in the company with an investment of 
60 crore. This seems to a shift in strategy to IT companies from service companies.
"What we see today are early signs of this trend taking shape and I think it will be more visible in the near future. The growing appetite for internet through broadband, wireless and mobile handsets is the key business driver for IT product companies in the country," said Sumir Chadha, Managing Director, Sequoia Capital.
QHT is Sequoia's third such investment and it clearly shows that the firm is having favourable inclination towards software firms. Prior to this, Sequoia, with Indian Angel Network, invested $5 million in Druva Software, a global player in storage and data back-up solutions in April, 2010. An Indian IT product company, Ideacts Innovations had raised series A and B funding from Sequoia (2007) and SVB Capital (2009) to the tune of $5 million and $3 million, respectively.
"In the past 12 months, we have evaluated 700 companies and approximately 45% of those, or 315, were product companies.We continue to look at product companies and have so far committed Rs130 crore across five investments including 3DSOC, iViZ, Manthan, Perfint and i-Create," said Sudhir Sethi, Founder, Chairman and Managing Director, IDG Ventures India.
The change is being possible because of the growing demand of IT products in the Indian market. Now the consumers are willing to pay for IT products, which was not the case earlier. Investment firms are looking at mobile applications, products targeted at the healthcare and education sectors, business intelligence and analytics, digital or enterprise and consumer security and medical devices.
60 crore. This seems to a shift in strategy to IT companies from service companies.
"What we see today are early signs of this trend taking shape and I think it will be more visible in the near future. The growing appetite for internet through broadband, wireless and mobile handsets is the key business driver for IT product companies in the country," said Sumir Chadha, Managing Director, Sequoia Capital.
QHT is Sequoia's third such investment and it clearly shows that the firm is having favourable inclination towards software firms. Prior to this, Sequoia, with Indian Angel Network, invested $5 million in Druva Software, a global player in storage and data back-up solutions in April, 2010. An Indian IT product company, Ideacts Innovations had raised series A and B funding from Sequoia (2007) and SVB Capital (2009) to the tune of $5 million and $3 million, respectively.
"In the past 12 months, we have evaluated 700 companies and approximately 45% of those, or 315, were product companies.We continue to look at product companies and have so far committed Rs130 crore across five investments including 3DSOC, iViZ, Manthan, Perfint and i-Create," said Sudhir Sethi, Founder, Chairman and Managing Director, IDG Ventures India.
The change is being possible because of the growing demand of IT products in the Indian market. Now the consumers are willing to pay for IT products, which was not the case earlier. Investment firms are looking at mobile applications, products targeted at the healthcare and education sectors, business intelligence and analytics, digital or enterprise and consumer security and medical devices.
