VCs searching the world for ideas, disruptive ideas
VCs searching the world for ideas, disruptive ideas.
Economic Times reports that Wipro Ventures, the $100-million venture capital arm of India's third largest outsourcing firm Wipro, plans to bet big on mature, disruptive ideas from some of the world's best startup ecosystems such as the Silicon Valley and Israel, at a time when the company is starting to tap a large number of startups simultaneously through investments in VC firms. Wipro Ventures' team recently even spent a few weeks in Tel Aviv, where they met dozens of startups and venture capital firms with portfolios of early-stage ventures focusing on enterprise technology and areas such as cybersecurity.
In an exclusive interview with ET earlier in June, Venu Pemmaraju and Biplab Adhya who jointly spearhead Wipro Ventures said that the venture capital arm wants to focus on startups that are capable of solving "complex enterprise problems." "We did spend some time in Israel a few weeks back, and we see a lot of diversity in the startup ecosystem in Israel," said Adhya. "In terms of domain, they solve pretty complex enterprise problems," said Adhya, adding that Wipro Ventures usually looks to bet on slightly more mature startups that have some level of customer traction and not very early stage ventures.
Last week, Wipro Ventures invested an undisclosed amount in Israel based venture capital firm TLV Partners, marking its first investment in a venture capital firm. "Typically, we look at startups that have a product, a few customers, therefore we can partner with them and take them to our enterprise customers. Our enterprise customers would be wary of a PPT presented to them when the product is not backed by customers," said Pemmaraju, adding Wipro Ventures currently has no plans of forming an accelerator or incubator programme inside the company to nurture startups. According to a third executive, who requested anonymity, Wipro Ventures will aim to close at least six to eight deals this year, while allocating some funds for investments out of India.
Indian IT companies such as Infosys and Wipro have so far focused a majority of their startup bets on ventures coming out of the US and Israel with very few bets on Indian enterprise startups — a clear sign that Indian enterprise startups are yet to reach the maturity and competence levels of their Valley and Israel-based counterparts, according to experts. Wipro Ventures has also formed a separate investment committee to oversee all its startup investments — a move similar to the one undertaken by cross-town rival Infosys, which last year formed an investment committee on its board, spearheaded by Omidyar India chief Roopa Kudva. Wipro declined to comment on the current composition of the committee, but said the composition of the committee was flexible." The composition (of the committee) can change based on the size and domain of the deal," said Pemmaraju, who was a former Intel Capital executive.
Experts who are closely tracking disruptive startup bets from Indian IT firms said the strategy of focusing mostly on Valley and Israel based startups may end up backfiring for top IT firms. "The key reason that some of the companies are setting up venture funds in Israel and Silicon Valley is that they have an inferiority complex and can't see the big opportunities in their own backyards... Just watch and see how these Indian companies lose their shirts in the investments they make abroad while savvy foreign investors who are investing in Indian startups reap the rewards," said Vivek Wadhwa, a fellow at Stanford University's Arthur and Toni Rembe Rock Center for Corporate Governance.