Cisco's investment arm Cisco Corporate Development Fund is planning its second exit from India. According to sources close to the development, the global networking and communications major is planning to exit an investee company within the next one quarter.
The company had made its first exit from data centre services provider Netmagic last week when Japan’s NTT Communications bought a majority stake in the company for about Rs 900 crore. Netmagic is one of the early investments of Cisco. The company secured investments worth $16 million from Cisco, Fidelity, Nexus Ventures and Nokia Growth Partners in October 2010.
A company official declined to comment when asked about Cisco’s plans to exit its investments in Indian companies. “We follow a typical VC agreement culture when we make the funding. We intend to exit a company in four to six years,” according to Joydeep Bose, MD (investment and acquisition - Asia Pacific), Cisco.
The company’s venture capital funding arm entered India with the aim of investing in firms that are strategically important for its businesses like video, collaboration and networking. According to sources, the company operates a $200-million corporate fund in India.
“We see a huge opportunity in India, especially in the cloud and broadband services,” Bose said. “We are seeing the adoption of technologies like LTE (an advanced mobile communication standard) and national broadband network in the Asia Pacific and Japan regions. India ranks number one in terms of our focus followed by Japan and Australia.”
In the last nine months, Cisco’s venture capital fund has invested in four-five companies, including Global Talent Track and Shekhar Kapur Digital Media, a joint venture between filmmaker Shekhar Kapur and music director A R Rahman.
In September last year, Cisco invested in Aavishkaar India Micro Venture Capital Fund—a fund created to promote inclusive development
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in rural and semi-urban regions in India. The $70 million fund has four other investors including CDC investment, Netherlands-based FMO and International Finance Corporation.
Cisco’s portfolio in India also includes Indiagames, Comviva, Nimbus Communications, Real Image, Servion, SureWaves and Mycity. “We have enough headroom and opportunities,” said Bose. “We may invest in four-five deals in the next 12 months.”
| CISCO'S PORTFOLIO IN INDIA | |||
| Company | Investors | Amount ($mn) | Date |
| Indiagames | Cisco, Others | 4 | Apr ’05 |
| Comviva Technologies | Cisco, Sequoia Capital India | 14 | Dec ‘05 |
| Nimbus Communications | 3i, Cisco, Oman Investment Fund | 125 | Jan ‘07 |
| SureWaves | Cisco, Artiman Ventures, Reliance Venture | 8 | Sep ‘08 |
| Nimbus Communications | 3i, Cisco, Oman Investment Fund | 50 | Feb ‘09 |
| NetMagic | Cisco, Fidelity, Nexus Ventures, Nokia Growth Partners | 16 | Oct ‘10 |
| Shekhar Kapur Digital Media | Cisco | NA | Oct ‘11 |
| Global Talent Track | Cisco | NA | Nov ‘11 |
| Source: Venture Intelligence, a research service focused on Private Equity & M&A | |||
The company also that it was actively looking at companies into data analytics, mobile delivery, video delivery, education and healthcare for acquisition. Four of the 140-odd acquisitions Cisco has made so far globally are Indian companies.