The Venture Intelligence Blog

Software and BPO services aren't the only areas where Indian companies are competitive on a global scale. Private equity investors have realized this early and voted with their cheque books in favor of pharmaceuticals, textiles and even steel companies in 2004. How come? "Indian manufacturers in these industries are getting coupled into global supply chains. It can only mean more global trade in the coming years," writes Businessworld's economics editor, Niranjan Rajadhyaksha. More factoids from the article: India's total foreign trade this year will be about 32 per cent of its total GDP. It means that about a third of our national economy is now linked to the rest of the world... ..Exports today account for about 15 per cent of India's GDP. So a 25 per cent rise in exports adds about 4 per cent to India's GDP growth rate. Or to put it another way, over half of economic growth this year will be accounted for by foreign demand.

Software services are an old story. Product companies - except for a few exceptions - have not taken off (for the usual set of reasons: marketing costs are prohibitive, etc. etc.). So what's new to write about the Indian software industry? "Product development services", according to a Businessworld article . What is a product development services company? Typically, when any company starts to develop a software product, it would have a unique differentiator or core of the product. That core generally accounts for 15 per cent of the development work of the product. This would invariably be developed in-house. But the product would also have a lot of other modules. These are essential, but they are not big differentiators. This is where product development services companies step in - they develop these non-core modules. Who are the players in this space? Bangalore-based Symphony Services was among the early players. Then there are Aditi Technologies and A...

In 2004, up to November, venture capital and private equity funds invested over $820 million in India-based companies, according to data from TSJ Media, the Chennai-based firm that tracks venture capital investments and mergers. But less than 10 per cent of this money found its way to start-ups. The pendulum is starting to swing the other way again because new investors are coming forward to invest in the several start-ups that have sprung up in the last two years or so. Explains Arun Natrajan, editor at TSJ Media : “The founders and early employees of IT services companies who have made it big are beginning to make serious investments in local companies.” He cites the example of Infosys co-founder N.S. Raghavan’s Nadathur Holdings which invested $7 million in the apparel design subsidiary of the Bangalore-based Reach Technologies in March 2004, adding that successful non-resident Indians like Vinod Dham and Tushar Dave of NewPath Ventures, their venture capital company, have i...

Businessworld magazine has published an article on why there has been a flurry of activity, interest and announcements in the recent times for manufacturing mobile telephone handsets in India. So, whose's making (going to make) handsets in India? Why India? The sheer size of the Indian market, its frenetic growth rates, and above all, the fact that it conforms to global standards...The Indian mobile market is expected to add around 20 million new subscribers in 2004. At an average price of Rs 5,000 a handset, the Indian mobile market is worth Rs 10,000 crore ($2.22 billion) already...And it is still growing very fast. In fact, the handset market is expected to grow at 35 per cent year-on-year on an average till 2010. In 2005, nearly 37 million handsets worth $4.2 billion are likely to be sold in the country. That will make India the third largest mobile handset market, after China and the US. By 2008, handset sales are estimated to touch 50 million, catapulting In...

What could be new or interesting about "yet another VC-backed BPO Firm" launching yet another call center facility? Luckily for me, I did not let this question dissuade me from attending the launch of the 24/7 Customer's latest facility in Chennai last week. A freewheeling conversation with P.V. Kannan, Co-Founder & CEO of 24/7 Customer, after the launch event, left me with a feeling that it would be wrong to slot his company with the rest of the pack. Here are a few factors that contributed to this feeling: One is Kannan's impatient attitude - including, refreshingly for me (but not necessarily for good for the company's PR firm), in the presence of journalists. Bangalore has enough PR savvy CEOs - including some who had journalists eating out their hands - but who are not so good when it comes to fetching returns for investors in their companies. Two, his strong bias for action (versus intellectual debates). Kannan believes the formula for succes...

Rajiv Gupta, an former HP executive who co-founded and sold Confluent Software (a Sunnyvale, CA-based provider of software for managing Web services) to Oblix in February 2004, has created a new "web telephony company" called Cirxit , reports SiliconBeat . Cirxit is powering local portal CitySearch's pay-per-call service under which advertisers pay CitySearch whenever a visitor to the latter's site make an telephone-based enquiry. Gupta wouldn't tell us much about CIRXIT, which is just now coming out of stealth mode — how many employees, how it's funded or much about its technology. The company doesn't even have a public web site yet. Gupta described CIRXIT as a "web telephony company." Its technology allows Citysearch to offer its customers a unique customer phone number that CitySearch can monitor. When a call comes in to an advertiser, Citysearch can charge the merchant for the call. "In some sense, what we're doing here is w...

Mumbai-based Dickenson Intellinetics has launched "VC Guide for India 2004-05" providing profiles of national and international Venture Capital/Private Equity that have a keen interest in India. Using a standard template for each VC/PE firm, the Guide sets out crucial information - industry preferences, preferred investment stages, financing role, type of funding, main source of capital, as well as contact information. The Guide also includes an overview of the venture capital industry in India based on Dickenson's survey of 80 VC/PE firms. One of the highlights of the Guide is an index of VC/PE firms by industry preferences and minimum investment size. Located at the very beginning of the Guide, the index provides an easy and quick way to specific VC/PE firms listed within. The VC Guide is priced at Rs 6,900 for India and US$295 for other markets. Visit http://www.vcindia.com for more information about the Guide.