"We are looking at a dozen investment opportunities in India. In the next few months we will close the first three investments in India," said Bill McDermott, president and CEO, SAP Americas and Asia Pacific Japan states. The venture arm will further look at a similar numbers of firms for investment over the next 6-12 months.
SAP Venture in India will focus on investing in firms having presence in IT Enabled services, managed services and customer oriented technology. "Interestingly there are some innovative product firms as well in India. We would also look at such firms, who are India focused and we can help in growing into other geographies like the Middle East, Europe or the US," said Jai Das, partner, SAP Ventures.
Globally the venture arm keeps its equity base in any of the invested firms to less than 20 per cent. It plans to continue with the same in India. "We prefer to invest in firms with a revenue in the range of $5 -10 million. So we come into picture in the second or third phase of funding for a company," added Das.
For SAP investment into start-ups is not with an intention of an acquisition. "There are two issue when we look at investing. First is the financial of the company. Our investments must get us good returns over a period of time. Two, we look for innovation on which SAP can value add with its own solutions," added McDermott.
SAP Ventures globally has invested in close to 70 firms and two-third of these companies end-up working with SAP.
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On the investment in India, the company might overrun its investment target of $1 billion till 2010, said McDermott. "SAP India has been the fastest growing country within SAP worldwide in 2007. We have doubled our revenues and customer base compared to last year. In accordance with this growth we have also invested in expanding our sales and marketing team," he added.
SAP India will also focus on building SAP Consultants in India. "In a global study we had found that there is a skill shortage of 60,000 SAP Consultants. To address this we are concentrating on the training programme. There is a similar shortage in India as well. We see majority of SAP consultants coming from India especially from the tier II and III cities. As the opportunity is huge," said Ranjan Das, president and CEO SAP India.