 "Bhavanipratap Rana")
Even as Intel Capital has no set amount of money that it would invest or any targeted number of deals it wishes to close during the year, the firm is likely to match the kind of investments it made in 2013, Bhavanipratap Rana, director India at Intel Capital, told Business Standard.
“I think 2014 will be a busier and better year than 2013,” Rana said. “The slope of the (investment) curve is certainly trending in the right direction and the uptick is on. Right now we are looking at far more deals than earlier.”
In 2013, Intel Capital had said it would invest $16 million (around Rs 101 crore) in three e-commerce ventures across Asia, including two Indian firms — Bright Lifecare and Snapdeal. During the year, the firm had also invested $65 million (Rs 411.2 crore) across 16 technology companies including two from India — Perpetuuiti Technosoft and Savaari Car Rentals. Besides, these four Indian companies, Intel Capital also invested in eTechAces Marketing and Consulting (which operates insurance website PolicyBazaar), and IT infrastructure services provider NexGen.
Intel Capital, which has remained bullish on the rapid adoption of 3G and broadband in India, will continue to focus on investing in companies that support the ecosystem and technology infrastructure required for future growth of internet usage in the country. In 2014, the firm would look at companies operating in spaces such as data centre software, internet of things and wearable devices.
“When you look at the macro trends, they are all very positive. India is the second-fastest country in terms of adding online users, and you have three-fourth of the population under 35 years of age, so it is a highly consumptive demographic,” Rana said. “All the other trends such as smartphone penetration going up, and 2G plans price dropping do extremely well for us.”
Of all the areas relating to internet and mobile technology, Rana said that the wearable devices segment has picked up in India in recent months.
In an interview to Business Standard in November 2013, Sudheer Kuppam, Intel Capital’s managing director (Asia-Pacific), had said the venture capital firm expects India to add 300 million internet users over the next five years.
While Intel Capital did not see any slowdown in investment in the Indian IT sector, despite the overall sluggishness in business environment over the past two years, Rana said there are several reasons that are hinting towards a likely uptick in investment activity in India going forward. Besides the promising outlook that Intel Capital has for demand in India, he said the country is today producing world-class products, amid a robust startup ecosystem that has evolved over the recent years.
Rana, who moved to India last year after a ten-year stint with Intel Capital in the US, believes that the Indian startup space has matured to a great extent with a richer human capital who have more experience.
“In my first phase of investing in India (10 years ago), we were very clear that we are not doing IT services companies as investments, but most of our peers at that time we still chasing IT services companies because the growth was there,” Rana said. “But now when you look at where the most activity is happening, you don’t see people investing in IT services companies. You see them funding product companies and you find them doing a lot of digital technology and stuff.”
He said, India now has a track record of successful product companies, and there is no dirth of mentorship for entrepreneurs who wish to develop products. “You need to have an ecosystem to nurture product companies, and that ecosystem now exists in India,” he said.
Commenting on the recent surge in acquisition activity in the IT products space in India, Rana said it is positive for the ecosystem as more such stories would give confident to investors to believe in Indian start ups in this space.
“I would say it is positive for the industry. You know money effectively chases where the returns are. So if you start seeing success stories along the way they (angel investors, venture capital firms and private equity players) can see that there is a healthy market for exits in India and they are going to back you,” Rana said. “Investors are not going to be worried about finding a ready acquired at the end of their investment.”
