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Showing posts from November, 2005

VentureWoods becomes a group blog

VentureWoods a blog started by entrepreneur-turned-VC Alok Mittal has since turned into a platform with multiple contributors (including yours truly) from the Indian VC-Start-up eco-system. Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

TCS steps on the gas

Businessworld has a cover story on TCS' growth strategies post its IPO. Here is an extract relating to the acquisition strategy of India' top IT services firm: Apart from HCL Technologies, TCS has been the most systematic player in the M&A game. In December 2001, the company put in place a specialist M&A team that would function as a think-tank on strategic acquisitions both in India and overseas. The team was led by Mahesh Bhandari and Debasis Pottdar, both former M&A specialists with Arthur D. Little and Arthur Anderson respectively. Over the last four years, the M&A think-tank has guided TCS's spree of acquisitions, including the critical consolidation of its BPO holdings. It sold its stake in Intelenet, a joint venture with HDFC, and merged the Tata group's holdings in Airline Financial Services, WTI and Phoenix Global Solutions to create TCS BPO last year. In addition, it has also helped rationalise TCS's various joint ventures across the globe

"Sequoia-Indiatimes deal off"

Sequoia Capital has decided against partnering WestBridge Capital in their proposed investment into Times Internet which operates the portal and e-commerce service, reports Businessworld . It was planned that a consortium of WestBridge Capital Partners and Sequoia Capital will take up 15 per cent of Indiatimes' equity. But the deal did not go through. Now only WestBridge has taken a 2.9 per cent stake. ...Earlier, Indiatimes was keen on the 15 per cent stake sale as it wanted to list directly on the Nasdaq in the US. It reckoned that the experience and network of Goldman Sachs-backed WestBridge and Silicon Valley-based venture fund Sequoia Capital would have been valuable for the company in getting a strong valuation. However, a recent guideline by the finance ministry has undone its plans. The ministry tightened the guidelines for foreign currency convertible bond (FCCB) and global depository receipt (GDR) issues to align them with the Securities and Exchange Board

Will Glenmark's new drug propel it to the big league?

Businessworld profiles Glenmark's early success with its new experimental drug oglemilast meant to treat asthma and chronic obstructive pulmonary disease. The deal with Forest Labs is worth $190 million (Rs 836 crore) in all, the largest by any Indian drug maker - including the biggies in the swanky campuses. (The largest before this was the $65-million partnership between Ranbaxy and Bayer for the former's extended release version of Bayer's antibiotic Cipro.) Even the deal with Teijin, worth $53 million (Rs 233 crore), is substantial for a company the size of Glenmark. And a third deal is being negotiated with a European partner. ...While the size of the deal is impressive by itself, the circumstances in which it was struck are more striking. Forest came in even before the drug was tested on humans. For Glenmark, it was the first molecule to be licensed. Yet, the deal dwarfs those struck by bigwigs more than twice Glenmark's size. "Forest must have seen someth

Opportunities and perils for Indian cos. hunting for global auto part makers

"Plenty of global auto part makers are up for sale. And the money is not hard to find. But there are big risks, and Indian companies need to choose their targets well," says a recent Businessworld cover story. Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

Forbes on the new boom in India's textile industry

Forbes has an article on the new boom in India's textile industry. Some extracts: The industry accounts for 30% of India's exports. China does a much larger dollar volume in textiles, but still the sector accounts for only 18% of China's exports. India, like China, chafed for decades under quotas that limited how much it could send to the U.S. and Europe. In January those quotas were lifted and exports from both countries shot up. In the first five months of this year China's exports of cloth and apparel to the U.S. jumped 54% to $9.9 billion. India's volume was up 29% to $2.3 billion, according to the International Labour Organization, a UN adjunct. ...Last year the Indian government finally cut duties on imported textile machinery. In a further effort to boost the industry's competitiveness, the government this summer announced plans to spend $150 million creating (with private partners) 25 textile parks by 2008--enough for 500,000 new jobs. Each park will cl

Refreshing "Web Two Point Oh!"

In case you track the Web 2.0 scene/debate (aka by some as "Bubble 2.0"), check this site out. Just refreshing the page will get you new "VC friendly" Web 2.0 company name and business model. Here are a couple of examples it generated for me: Your company name: Seconoorb Your company product: tag-based blogs on the desktop Your company name: Seckoroll Your company product: geotag-based blogs via flash Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

Paul Graham weighs in in favor of founder sales

In August 2005, I made a post saying why I thought it might be a good idea for VCs to actually insist on "limited founder sales" when they invest in a company - i.e., a *part* of the investment amount goes towards buying the shares owned by founders, rather than into the company. I had said: I think this will help reduce the all-too-famailiar clashes between founders and their VC backers post the initial honeymoon period. Letting the founders take "a little bit off the table" reduces their risk in doing what VCs what companies all their investee companies to do: grow faster. Now, in a new essay titled "The Venture Capital squeeze", Paul Graham - a co-founder of ViaWeb (acquired by Yahoo for $50 million) - warns VCs that "if (they) are frightened at the idea of letting founders partially cash out, let me tell them something still more frightening: you are now competing directly with Google." Click Here to read Graham's very interesting arti

US recruitment firm specializes in "angel employees"

With Internet-based services companies back in favor among US VC investors (a phenomenon aka "Web 2.0" or "Bubble 2.0"), can service providers and wannabee start-up executives be far behind? Scripps Howard News Service has an article on PeopleConnect, an exectuive search firm that actually has a branded program called "Employees Without Paychecks" that focuses on placing executives and tech professionals who are willing to work at start-ups without pay until the clients' VC funding comes through. PeopleConnect is the first search firm to market a program of recruiting employees who will work for equity. "A friend of mine calls them 'angel employees,'" (PeopleConnect CEO) Max Shapiro, said, comparing them to angel investors, who fund early-stage companies. ... Shapiro markets the Employees Without Paychecks program to early-stage companies that, like Commendo Software, are just a few months away from seeking venture funding. He selec

Debate on the investment "sweet spot"

Anand Sridharan of Bessemer Venture Partners-India and Roshan D'Silva, Managing Partner of Middle East technology incubator One Nine Three (and co-founder of IIT-Bombay incubatee MyZus Infotech), have an interesting debate going on Anand's blog on whether late-stage, non-tech investments will score over early stage tech focused investments. Some Extracts: Roshan: India needs early stage capital today. The market is large and is ideal for an investor who can cherry pick the companies who he can back. I see no reason to sacrifice returns and join the crowd....I just feel there is more money to be made in the long run by building a very traditional Silicon Valley-ish Venture Capital firm investing in india. Anand: Where is the actual investment opportunity, specific to the Indian market? Non-tech, growth capital opportunities outnumber tech, venture capital opportunities by an order of magnitude. Possibly even higher, if you apply a quality filter. Indian IP/tech startup scene is

BlueRun Ventures' Vineet Buch launches blog

Vineet Buch, a Principal at BlueRun Ventures , has launched a blog titled Venture Explorer Update: Buch recalls how he was hired away in March 2005 by BlueRun Ventures when the firm invested in Ojos (now, the online photo search technology company that he co-founded. John Malloy at BlueRun asked me to join his firm and work with Ojos as an investor... ...Munjal Shah (Ojas Co-founder and CEO) and I sketched out a strategy for Ojos over a year ago, in terms of product, markets, hiring, burn rate, etc., etc. ...Ojos set up India operations two months after the US, everybody hired in India showed up for work and is still there, and the India team was productive on their second day on the job. (Those who know the Bangalore hiring climate today will be shocked to hear this). Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence I

Entrepreneur-turned-VC launches blog

Alok Mittal, the co-founder of (acquired by in 2004) and now a venture capitalist with Barings India Private Equity, has launched a blog titled VentureWoods . In one of his early posts , Mittal talks about "Band of Angels India", a group of successful entrepreneurs and executives (of which he is a member) with a passion to invest in and mentor early stage businesses. The application process to BoA involves sending in an executive summary to any of the members (yes, investors themselves take decisions here, there are no “investment managers”) and convince them that what you have is a potentially successful business. The member than “sponsors” the proposal to the whole group. Members in the group make individual decisions on whether to invest in any particular opportunity — for example, 4 members may decide to fund a given venture. The members continue to be involved in the mentoring process. Typical deal size at BoA is less than Rs 2 crores. We expect