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June 20, 2005

The Tejas Networks Story

Tejas Networks' $17 million third round funding led by Battery Ventures is getting the firm a lot of ink. Businessworld magazine recently published a three page profile of the telecom equipment firm describing its founding and evolution. An extract:
Tejas still gets 80 per cent of its revenues from the domestic market, which is all of $250 million in size. Compared to this, the global market for Tejas's products is worth more than $5 billion. Apart from large companies like Lucent, Nortel and Alcatel, this global market is served by players like Huawei, ZTE and UT Star. And (Tejas' angel investor Desh) Deshpande estimates that the Chinese companies are going to corner a quarter of the entire telecom equipment market in a few years.

He says: "Tejas needs to grow 100-fold to get the critical mass to compete globally." That's why the OEM route is a good way for Tejas to grow. Though it earns lower margins, it ensures that the company doesn't have to spend large chunks of its earnings in marketing abroad. It would also help Tejas achieve its target of getting 40 per cent of revenues from global sales in two years.

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.