Abrar Hussain (US-based law firm Greenberg Traurig LLP, via Venture Intelligence India) on whats holding back Indian venture capital:
1) Innovation Why is it that Indians in the Valley can innovate and create something new and when you put them back in India they cant seem to do the same thing?
2) Visibility It takes a lot of trust to give someone money. Venture capital is all about trust; trust in the entrepreneur, trust in his team and trust in the idea. This goes hand in hand with visibility.
3) Pervasive Understanding of Venture Investment Any serious investor (and many not so serious investors) in Silicon Valley can tell you about the basics of an early round investment in Silicon Valley.
4) Exit Strategy Most Indian technology companies are focused on services. The problem is that it’s hard to create a big exit for a services company.
Vineet Buch (of BlueRun Ventures):
* Consumer Internet: Internet and PC penetration remains low in India, but growth rates are encouraging.
* Mobile Value Added Services: Value-added services (VAS), such as ringtones and ringback tones, are big sources of revenue to Indian wireless carriers.
* Component Manufacturers for ODMs/OEMs: India is (finally!) getting significant high-tech manufacturing investment from big players like Nokia, Foxconn, and AMD.
* Fabless Semiconductor Companies: Big companies like TI and Intel have nurtured a technical talent pool in India in their 15+ years of local operation.
* Clean Technology: India’s growing hunger for energy, its problems with pollution and waste management, and the domestic research base in electrochemistry, photovoltaics and efficient power generation provide fertile soil for clean technology startups.
* Software: The staple of the Indian tech boom. My bet is that as the large number of relatively undifferentiated offshore development companies consolidate, among the survivors will be companies that translate market knowledge gained by working with their customers into software products or services that can form the foundation of a scalable business.
Arvind Sodhani of Intel Capital in an interview with the Financial Express:
Q: You have also exhorted a move beyond services to products. Do you see that happening soon enough?
The challenge for India is that there is not much happening in the product management space. In other words, you may know how to build a product. However, are you building the right product? Here is where a lot of returnees from Silicon Valley could add value in the product management methodology to find out what the consumer really wants.
Q: Mobile telephony is growing rapidly in India. Would this be a major focus area for the fund?
Handheld is a major focus area. Wireless broadband is also a very major focus area with Wi-Max being at the centre of our wireless broadband initiative. So you can expect us to invest aggressively not just in India but throughout the world in Wi-Max deployment over the next couple of years. In India, we have invested in a lot of good technology companies that address the global market like Sasken. But we also see a lot of mobile growth here and companies generating products for the local market. We have met with a few companies but we are not ready to disclose anything yet.
Q: Apart from education, which are the other areas that could grow the local market and that are of interest to Intel?
Broadband is one area where we are definitely looking at. India is now the cheapest cellular telephony market and the fastest growing. We believe there will be similar growth of broadband as a result of Wimax and wireless broadband deployment. E-governance is another area where there is a lot of opportunity.
Tomorrow: What Others Say (continued)
TECH TALK India Internet and Mobile+T