 "First generation IT entrepreneurs are at 'IT' again")
They could be past their prime but the original founders of the $150-billion Indian information technology (IT) industry are far from hanging up their boots. Over a dozen first-generation entrepreneurs who were instrumental in putting India on the global technology map are busy investing and raising scores of start-ups in the country. For IT and BPO founders such as Raman Roy (Genpact and Quatrro), Ajai Chowdhry (HCL Infosystems) and Saurabh Srivastava (IIS Infotech/ Xansa), it is a rewind to the late 70s and 80s, when they founded their respective companies. Only they are not in the driving seat any more.
With investments anywhere between Rs 5 lakh and Rs 50 lakh each in 25 to 30 companies, these executives say they might have lost the appetite to build another company on their own, but are channelling their passion and expertise by strategising for young minds who are building successful enterprises of the future.
While the trend of angel entrepreneurs is not new, the number of investors and their portfolios are swelling by the day. Pramod Bhasin and Jaithirth Rao are only some more names in the long list. “Since they are co-invested, they are like proxy entrepreneurs,” said Sharad Sharma, co-founder of start-up think-tank iSpirit. “They are driven, passionate, bring 30-35 years of experience to the table, plus it is an invigorating experience for them, keeps them young,” he added. Sharma, himself a founder of Tiltier Technologies (now part of Cisco) and an angel investor, added that being part of a new company put senior people in the “underdog” position once again, since they were used to being the top dog, after the successes of their first ventures. “It is a challenge they find addictive,” he added.
Investors such as Roy, Sharma, Srivastava and Chowdhry have company in founders of larger technology companies — Azim Premji, N R Narayana Murthy and S (Kris) Gopalakrishnan who are also an active part of the start-up ecosystem. However, Premji and Murthy are not just angel investors and have taken much larger bets.
For instance, assets under management of PremjiInvest are worth over $2 billion and is known for making investments in the range of $20 million to $60 million. Similarly, Murthy's Catamaran Ventures has a corpus of over Rs 600 crore.
RAMAN ROY
Raman Roy, considered to be one of the founders of the Indian BPO industry, says that he has made investments in over 25 companies so far which are not restricted to just technology. While one of his investments is called High Street Essentials, the other deals with momos. Roy who called meeting new entrepreneurs the "most energising moments" says that when he started out there was no ecosystem of people who could mentor you or even give you the money.
"These guys are so full of confidence, their ideas are great and they give you a channel to look at new ways of things," he adds. But not everything succeeds. There are deals which can give you 30 times the returns and there are companies, which go belly up. "But it more than evens out… One good deal stands in for 9 others that go bad. So, end of the day this also makes money though, it is not the main driver," added Roy, who has so far betted around half a million dollars on start-ups.
Saurabh Srivastava, who has been part of this ecosystem for a much longer period said that he has made almost 55 investments till date out which 25-30 are still current. "The story is still the same, how IT is transforming business and transforming our lives," said Srivastava. He added that the current generation is reaping the benefits of what the first generation of entrepreneurs created. "We built an industry with a critical mass of knowledge and millions of people… the global brand for IT in India which was created attracted venture capital into India now apart from giving lots of role models to this generation," he said. Srivastava added that before the Indian IT industry became successful, there was no precedent of first generation middle class entrepreneurs who succeeded. "You only had the Tatas, Birlas, and the Singhanias…"
Not just founders but many senior executives of the IT industry who have been leading companies for many years are also jumping into the ecosystem now. "Once you have done a few companies, you lose the passion and the drive… You are comfortable, you have made the money, you can't do another company but mentoring keeps you mentally very engaged," he said, adding that he works harder than when he was running a company. "No weekends," he laughs.
For Ajai Chowdhry, co-founder of HCL, investing in companies is a way of giving back to the ecosystem, "what you learnt as an entrepreneur." He has invested in around 30 companies coming from diverse backgrounds such as communications, education, technology, e-commerce, rural distribution, fast food, clean tech and biotech, etc. While most of them are in India some are in Singapore and UK. Chowdhry says that he helps them wade through challenges of distribution and sales lending his experience of running HCL Infosystems which had a large distribution contract with Nokia or by putting the entrepreneurs in touch with the right advisors from his own network. Chowdhry says it is much more than just making money. "It's a lot of fun; it's a very exciting marketplace… My email box gets filled up all the time these days. There are all kinds of requests, LinkedIn, Facebook…"
With investments anywhere between Rs 5 lakh and Rs 50 lakh each in 25 to 30 companies, these executives say they might have lost the appetite to build another company on their own, but are channelling their passion and expertise by strategising for young minds who are building successful enterprises of the future.
While the trend of angel entrepreneurs is not new, the number of investors and their portfolios are swelling by the day. Pramod Bhasin and Jaithirth Rao are only some more names in the long list. “Since they are co-invested, they are like proxy entrepreneurs,” said Sharad Sharma, co-founder of start-up think-tank iSpirit. “They are driven, passionate, bring 30-35 years of experience to the table, plus it is an invigorating experience for them, keeps them young,” he added. Sharma, himself a founder of Tiltier Technologies (now part of Cisco) and an angel investor, added that being part of a new company put senior people in the “underdog” position once again, since they were used to being the top dog, after the successes of their first ventures. “It is a challenge they find addictive,” he added.
Investors such as Roy, Sharma, Srivastava and Chowdhry have company in founders of larger technology companies — Azim Premji, N R Narayana Murthy and S (Kris) Gopalakrishnan who are also an active part of the start-up ecosystem. However, Premji and Murthy are not just angel investors and have taken much larger bets.
For instance, assets under management of PremjiInvest are worth over $2 billion and is known for making investments in the range of $20 million to $60 million. Similarly, Murthy's Catamaran Ventures has a corpus of over Rs 600 crore.
| FRESH INNINGS |
| |
- Regarded as one of the founders of the BPO industry
- Founder of Spectramind & Quatrro
- Investments in 25 companies
- Stayzilla, High Street Essentials, Wowmomos, Vienova Education
- Helped establish tech firm IIS Infotech, which was later known as Xansa and acquired by Steria, co-founder of Nasscom
- Investments in 55 firms, of which 25-30 are current
- Stayzilla, Process Nine, Box8, Dhruva, Sapiente, Consure
- Co-founded Hindustan Computers Limited
- Investments in around 30 companies
- xSi Semiconductors, Roboticwares, Gram Vaani, KWENCH Library Solutions
Raman Roy, considered to be one of the founders of the Indian BPO industry, says that he has made investments in over 25 companies so far which are not restricted to just technology. While one of his investments is called High Street Essentials, the other deals with momos. Roy who called meeting new entrepreneurs the "most energising moments" says that when he started out there was no ecosystem of people who could mentor you or even give you the money.
"These guys are so full of confidence, their ideas are great and they give you a channel to look at new ways of things," he adds. But not everything succeeds. There are deals which can give you 30 times the returns and there are companies, which go belly up. "But it more than evens out… One good deal stands in for 9 others that go bad. So, end of the day this also makes money though, it is not the main driver," added Roy, who has so far betted around half a million dollars on start-ups.
Saurabh Srivastava, who has been part of this ecosystem for a much longer period said that he has made almost 55 investments till date out which 25-30 are still current. "The story is still the same, how IT is transforming business and transforming our lives," said Srivastava. He added that the current generation is reaping the benefits of what the first generation of entrepreneurs created. "We built an industry with a critical mass of knowledge and millions of people… the global brand for IT in India which was created attracted venture capital into India now apart from giving lots of role models to this generation," he said. Srivastava added that before the Indian IT industry became successful, there was no precedent of first generation middle class entrepreneurs who succeeded. "You only had the Tatas, Birlas, and the Singhanias…"
Not just founders but many senior executives of the IT industry who have been leading companies for many years are also jumping into the ecosystem now. "Once you have done a few companies, you lose the passion and the drive… You are comfortable, you have made the money, you can't do another company but mentoring keeps you mentally very engaged," he said, adding that he works harder than when he was running a company. "No weekends," he laughs.
For Ajai Chowdhry, co-founder of HCL, investing in companies is a way of giving back to the ecosystem, "what you learnt as an entrepreneur." He has invested in around 30 companies coming from diverse backgrounds such as communications, education, technology, e-commerce, rural distribution, fast food, clean tech and biotech, etc. While most of them are in India some are in Singapore and UK. Chowdhry says that he helps them wade through challenges of distribution and sales lending his experience of running HCL Infosystems which had a large distribution contract with Nokia or by putting the entrepreneurs in touch with the right advisors from his own network. Chowdhry says it is much more than just making money. "It's a lot of fun; it's a very exciting marketplace… My email box gets filled up all the time these days. There are all kinds of requests, LinkedIn, Facebook…"