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January 17, 2004

Sumir Chadha's interview to Always-On Network


Sumir Chadha, Founder & Senior Managing Director of Bangalore and Silicon Valley based VC fund, WestBridge Capital, has been interviewed by Always-On Network. Chadha works out of WestBridge's office in Silicon Valley.

Some extracts from the interview:

On investment opportunities thrown up by the rapid growth in India's telecom sector:
We see explosive growth in telecom. Three years ago, India had the highest cost per minute in the world for wireless telecom. Now, it’s the cheapest—30 percent cheaper than even China. And a year ago, there were 8 million wireless subscribers in India. Today there are 22 million, and we’re seeing growth of 2 million subscribers per month. This is a revolution in the making.

Other investors are acting on these trends, as well. Warburg Pincus has its largest investment in India with Bharti Telecom, one of the largest wireless providers in India. Among domestic markets, India’s telecom infrastructure is seeing the same growth China’s telecom industry went through ten years ago, and we find it very interesting.

On the rising interest among Limited Partners to invest in Asia-focused funds:
There’s real disillusionment with US VC as an asset class. There’s a perception that the United States is overfunded, and there's some concern about the capital overhang...

...VCs in India are seen as an emerging market asset class. With India, LPs have heard about huge successes with software development companies. So, we’ve been contacted by a number of LPs interested specifically in India.

On offshore outsourcing trends:
The links between the Valley and India are becoming really strong. It’s coming about out of necessity and realities of the cost structure, because 80 percent of early-stage costs are development oriented.

...(One of our portfolio companies) Emagia, has developed its cash flow management product almost entirely in Hyderabad.

... It’s not the United States versus India; it's more of a partnership. Emagia, for instance, builds cash flow management software. It has key technical architects in Santa Clara, but the bulk of the development team is in India. You want architects close to the customer and product teams, and they’re mostly in the United States. This challenges Western developers to move up the value chain.

Click Here to read the full interview.