NEA-IndoUS Ventures has had a busy 2008 announcing investments in eight companies across sectors such as publishing outsourcing (PreMedia Global and Pressmart Media), software for educational institutions (Idenizen), online services (Seventymm), Communications Tech (Connectiva Systems and Bay Talkitec), Financial Services outsourcing (Basiz Fund Services) and waste recycling (Attero). Venture Intelligence’s N. Sriram spoke recently to NEA Indo-US Ventures Managing Director Vani Kola to learn more about the firm’s latest investments. The full version of this interview is to appear in the next issue of the India Venture Capital Report.
Venture Intelligence: Tell us more about Attero Recycling. Has this kind of business been VC-funded elsewhere?
Vani Kola: It’s the first of its kind in India for sure. This business is pretty much in existence in many countries in Europe but I cannot confirm whether they have been PE or VC funded. We are excited about this investment as India doesn’t have a proper solution for e-waste management. Nor do we have a proper recycling system for the e-goods that we use.
VI: You seem excited about outsourcing opportunities in the publishing industry. What is driving your interest in this sector?
VK: There are certain industries where the cost models are going through radical changes just like it happened with the IT industry. Publishing is one such space. Even with the advent of online news and online consumption of information, publishing still has a strong role to play. The cost models have changed fundamentally that India, as an enabler in the publishing industry, will continue to grow as a destination, much the same way as IT did. We are glad that we are early in that trend.
VI: Isn't selling to Indian educational institutions a tough business? What excites you about Idenizen?
VK: I agree that selling to educational institutions in India is difficult just in terms of how they adopt these kinds of solutions but we also understand that there is a need for different kinds of solutions in these institutions. What excited us about Idenizen was that they pioneered a very interesting business model. It is such that there is no cost to the educational institution at all and the benefit accrues to students if they pro-actively adopt next generation technology and solutions. The offer that Idenizen makes is that “we will bear the investment cost of setting up the solution for you as a college and if your students derive value from it, they will subscribe to it”.
VI: How does your investment in Basiz Fund Services correlate with the current environment for hedge funds in the US? Is this a play on their being forced to outsource more, given the tougher investing and fund-raising environment?
VK: It is similar to what we were discussing about publishing. Fund management companies in the US are facing cost & skills crunch. Cost cutting is where the arbitrage with India can be very effective. There are many companies in India rendering general purpose financial accounting services for companies in the US but Basiz is providing specialized accounting services to fund management companies.
VI: Given the turbulence in the airlines sector, how you do view your investment in Via?
VK: Via’s market-share in the overall pie is small and it has got ample scope to grow. Even though there is a slowdown in this aviation sector, there are people to be served who are always on the look out for cheaper airfares.
VI: Given Vinod Dham's background, we expected NEA-IUV to make some semiconductor-related investments. Can we expect any investments in this sector in the near future from your firm?
VK: It’s a sector that interests us, but we have not yet found any interesting opportunities. If we find interesting investment opportunities, we have no problem in considering it.
Venture Intelligence: Tell us more about Attero Recycling. Has this kind of business been VC-funded elsewhere?
Vani Kola: It’s the first of its kind in India for sure. This business is pretty much in existence in many countries in Europe but I cannot confirm whether they have been PE or VC funded. We are excited about this investment as India doesn’t have a proper solution for e-waste management. Nor do we have a proper recycling system for the e-goods that we use.
VI: You seem excited about outsourcing opportunities in the publishing industry. What is driving your interest in this sector?
VK: There are certain industries where the cost models are going through radical changes just like it happened with the IT industry. Publishing is one such space. Even with the advent of online news and online consumption of information, publishing still has a strong role to play. The cost models have changed fundamentally that India, as an enabler in the publishing industry, will continue to grow as a destination, much the same way as IT did. We are glad that we are early in that trend.
VI: Isn't selling to Indian educational institutions a tough business? What excites you about Idenizen?
VK: I agree that selling to educational institutions in India is difficult just in terms of how they adopt these kinds of solutions but we also understand that there is a need for different kinds of solutions in these institutions. What excited us about Idenizen was that they pioneered a very interesting business model. It is such that there is no cost to the educational institution at all and the benefit accrues to students if they pro-actively adopt next generation technology and solutions. The offer that Idenizen makes is that “we will bear the investment cost of setting up the solution for you as a college and if your students derive value from it, they will subscribe to it”.
VI: How does your investment in Basiz Fund Services correlate with the current environment for hedge funds in the US? Is this a play on their being forced to outsource more, given the tougher investing and fund-raising environment?
VK: It is similar to what we were discussing about publishing. Fund management companies in the US are facing cost & skills crunch. Cost cutting is where the arbitrage with India can be very effective. There are many companies in India rendering general purpose financial accounting services for companies in the US but Basiz is providing specialized accounting services to fund management companies.
VI: Given the turbulence in the airlines sector, how you do view your investment in Via?
VK: Via’s market-share in the overall pie is small and it has got ample scope to grow. Even though there is a slowdown in this aviation sector, there are people to be served who are always on the look out for cheaper airfares.
VI: Given Vinod Dham's background, we expected NEA-IUV to make some semiconductor-related investments. Can we expect any investments in this sector in the near future from your firm?
VK: It’s a sector that interests us, but we have not yet found any interesting opportunities. If we find interesting investment opportunities, we have no problem in considering it.