Intel Capital announces $250 m India specific fund

Intel Capital's decision to set up a $250 million India specific fund has come close on the heels of announcing similar funds for the China and Middle East & Turkey regions.

The roadmap announced by Craig Barret, CEO, Intel to set up this fund eclipses the China Fund which has a corpus of $200 million. This will be Intel Capital's fifth fund.

Intel Capital has been operating in India for nearly five years and has invested in product companies such as Tejas and Subex and some successful software firms.

According to industry analysts, this move by Intel will give tremendous impetus and focus to Indian technology entrepreneurship and will help in accelerate the software economy.

"There are at least 14 India specific funds in the offing with quite a good corpus and this decision by Intel is the perfect icing for the technology story out of India," a venture capitalist noted.

Venture capitalists over the last year invested more than $1 billion in Indian firms and this figure has already been crossed in the first nine months of the present year.

"We are witnessing unprecedented interest from global VC funds and I do not see any bubble in this wave," he added.

Intel Capital, has so far invested more than $4 billion in around 1,000 companies across the globe and presently has four focussed funds, Intel Digital Home Fund, Communication Fund besides the recently set up China Technology Fund and the Middle East & Turkey Fund.

Intel Capital's key areas of investment worldwide include the mobile PC platform, the digital home, enterprise computing, cellular/handheld platforms, communications infrastructure, and manufacturing technology.

While the China Fund has a corpus of $200 million, the Middle East one has been kicked off with $50 million.

The Digital Home is a $200 million private equity investment fund that invests in companies developing hardware and software, as well as connectivity and supporting technologies that are aligned with Intel's strategic efforts to drive convergence of personal computer and consumer electronics devices in the home.

Besides this is the Intel Communications Fund, a $500 million equity investment fund that invests in technology companies developing innovative networking and communications solutions and it is from this fund, a majority of the Indian companies in Intel Capital's portfolio are being funded. The plans by Intel Capital to look at an India specific fund is also in line with its strategy of expanding its non-US investments in the recent year.

International investing has increased from comprising less than five per cent of Intel Capital's deals in 1998 to about 40 per cent of deals in 2003. Of these, half of them were in Asian and Japanese companies and the rest were based in Eastern and Western Europe, Israel, and Latin America.