Norwest Venture Partners eyes consumer internet, software firms

The Norwest Venture Partners, a US-based venture capital firm promoted by Promod Haque, has chalked out a plan to make significant investments in India in consumer internet space and also in outsourced product development and software product firms.

Addressing a press conference, Pramod Haque, managing partner of Norwest said, "We have been witnessing a lot of investment opportunities in India over the last two or three years".

He said that booming middle class with higher purchasing power, growing broadband and wireless penetration and proven business models had attracted NVP to look at investments in consumer internet space.

"India is an early adopter of wireless technology. India, Korea and Japan are really ahead of US and Europe in wireless technology products," he added.

The Norwest Venture Partners manages about $1.8 billion funds to invest in US, India and Israel and has funded over 350 companies across the globe in the last four decades. In the last two years, it has invested in 18 companies, which are either headquartered in India or having major operations in India. Its average investment is about $10 million each.

He said that the company decides its investment strategy in new business ventures based on three key parameters - size of the market, experience of the entrepreneur and uniqueness of the product. "The company should be worth funding. If the market isn't large enough, it may not be worth funding," he said.

"We take into consideration the experience of the entrepreneurs also. By and large, we look for entrepreneurs with some experience, not necessarily in sales and marketing, but also in product development. They should have product development capabilities," he added.

"The uniqueness of the product or model is another criteria. NVP will not evince interest in those companies which come up with ideas or solutions to develop existing products at lower cost. We look for uniqueness in the space," he said.

As part of its investment plans in consumer internet space, it had recently made investment along with Reliance Capital and TV18 group in a travel portal, yatra online to provide domestic travellers with comprehensive travel-related information through call centres.

When asked about margins, Promod Haque said that venture capital firms generally look for IRR (internal rate of return) of 30 per cent and NVP's performance was significantly higher than that.