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February 16, 2005

Silicon Valley Bank's plans for India

Businessworld has a cover story featuring how Silicon Valley Bank is facilitating the entry of Bay Area VC firms and start-ups into India.

Founded in 1983 by a team of ex- managers from Bank of America, SVB's mandate was to bankroll young tech start-ups in Silicon Valley. Except that the mandate actually went well beyond opening a bank account and extending credit. Over the years, it has morphed into a networking machine that helps entrepreneurs hook up with lawyers, accountants and, most importantly, venture capitalists.

A few years ago, the bank decided to diversify its business risks and expand into other tech hubs in the world. So in 1998, Lilani was sent to India to lay the ground for a US-India forum that would bring Silicon Valley VCs and Indian tech entrepreneurs together. The result was an SVB-led reconnaissance mission by 20 of the Valley's top VCs to India in November 2003. This was the first step in setting up a venture capital hub in Bangalore. Then, in October 2004, the bank invited its West Coast clients to take up residence at "Sandhill East". Lilani expects two more VCs to join the 10 who have already signed up for India.

"This is a three-year commitment. It's not rent or sub-lease. It is more of a service consulting contract," says Lilani. This commitment implies two things. One, the VCs will use the SVB facility to help their portfolio companies, both old and new, move operations to India. Some of these will be relatively mature companies that will relocate a part of their existing R&D operations, mainly to Bangalore. Here, SVB's primary role will be to facilitate tie-ups with local vendors, help finalise office space and hire engineers. But its role as a catalyst will be magnified with respect to new start-ups like Veveo, which are looking to start R&D operations from day one in India...

...SVB expects 10 more fresh start-ups to be incubated at its facility by the end of the year. Since mid-December, more than 75 US technology companies have used the facilities to move operations to India.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.