Monday, January 9, 2006
Venture Capital in India

Excerpts from an interview with Sumant Mandal of Clearstone (whom I also met recently in Mumbai):


There is approximately $1 billion that's been raised for investment in private companies in India. I'm not quite sure how much of that is going to go towards IT or services businesses that are IT enabled, but I can say for sure that a vast majority of that money will go into existing and later-stage businesses. There is little or no real VC money available in India. Companies that are receiving money in India are either spin outs from existing large businesses (an example being GECIS, which is a spin out of GE), captive units or second tier outsourcing providers that may lack the size or scale to compete with giants like Wipro and Infosys and want the private equity money to grow through rollup and acquisitions. In the early-stage investing business, there are a few small funds that are local to India but have not done too many deals.

So there's a big hole in venture money for start-ups in the way we recognize them here in the U.S. (early stage, pre-product or pre-revenue companies), and a majority of the private equity is going into late stage businesses. There is quite a bit of competition for later-stage businesses as there are very few that have strong management teams and international aspirations. Funds that are active in India for later-stage investments are General Atlantic, Warburg Pincus, TPG, Carlyle and some local players like Chryscapital. We [Clearstone] would fit in the early-stage investing mold. For early-stage investing, there are either companies that are developing IT products that are internationally relevant (technologies that are servicing the North American or European markets but are built using Indian talent) or companies that are creating services targeted at the Indian consumer, where there is potential for hyper growth. Connectivity (mobile and broadband), content and enabling electronic commerce are good areas in India today.

Entrepreneurship | PermaLink | Comments (9)

Your vision of targeting the Indian Consumer is really a lateral thinking. Best Wishes for all your ventures

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Functionally, we must be able to –

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This leads to more questions - What type of information can we collect when we are mobile (location, pictures(MMS)), How can it be shared?, How can it be enhanced?

Software | PermaLink | Comments (8)

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...
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Software | PermaLink | Comments (12)

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[via Sadagopan] Dave Kellogg writes:


There's a big divide that exists in information technology. One that we're not supposed to talk about. One that we pretend doesn't exist, but in fact gets wider with each passing year -- it's the divide between data and content.

Data is a first-class citizen in the IT world. Data has a nice home. It lives in databases that offer control, consistency, security, backup/recovery, indexing, and a query mechanism.

Most content, on the other hand, is homeless, relegated to the file system. If you're lucky you're using a search engine to index content, so you can find files containing certain words or phrases. Or, with some additional setup, you can index a few XML tags, if present, and run fielded searches against them. But for most content, the full benefits of living in a database -- such as powerful, fined-grained queries, transaction consistency, and immediate availability -- just aren't available.

As a result, our understanding of content has become comparatively impoverished, our expectations for what is possible with content are reduced, and a myth gets perpetuated that content can and should be managed with the same tools and approaches as data.

Software | PermaLink | Comments (1)

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2006: Cautious Optimism

Shrikant Patil writes:


Nature demonstrated its anger in 2005. The next year could be one where there could some interesting outcomes. Some I fear are

- Reservations expanding from private education institutions (political parties ganged up against a supreme court ruling) to private enterprise. This will severely impact the meritrocracy hiring policies of all companies including IT.

- The China bubble could burst. The balloon is just bigger so needs to more air than previous occasions like Asian crisis of 1997.

- The U.S. dollar gets revalued lower triggering global economic chaos. This could also happen with the Yuan getting revalued higher.

- Indian businesses which depend on rupee revenues will struggle because of high real estate costs. The high real estate costs are driven by companies that have dollar incomes. So if you are not IT, not an exporter it will be tough to survive.

- Indian infrastructure will continue to decay thanks to our leaders like the President, PM and FM who will gloat in their past perfromance and our stupid people who will waste another year believing they will do something.

- Mobile business will continue to grow with new facilities like lifetime prepaid. Local calls all over India is a possibility.

- Low cost airline will continue to grow with more middle class Indian experiencing the Power to Fly. They will shift from Railways to Low Cost Carriers.

- Airport Infrastructure will not be able to keep up with the growth of airlines.

- Sensex will stabilize around 6500 to 7000.

Emerging Markets | PermaLink | Comments (2)

I like the choice of the word - Cautious Optimism. It was the most repeated word during market crashes and profit booking phase of the sensex's journey in 2005 ;)

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TECH TALK: 2006 Tech Trends: Broadband Networks Everywhere

6. Networks are becoming higher speed and ubiquitous.

Broadband is happening – on both wired and wireless networks. While countries like Japan and South Korea have had broadband for a few years, it is only now becoming widespread in the US and other markets. In India, the early signs are positive even through telecom operators still tend to do metering of traffic. Broadband is now an accepted reality. Even on wireless networks, the data speeds are improving. China and India are on the verge of announcing terms for 3G networks. WiFi hotspots are spreading and then there is the promise of WiMax on the near horizon. We are on our way to living in an envelope of connectivity.

Fred Wilson: “In Frank Barnako's Internet Daily, he quotes Kevin McKenzie, chief executive officer of JiWire.com, who says: ‘Wi-Fi is going to be ubiquitous. You're going to see more municipal hot zones going from announcement to reality. We've seen a huge increase in shops offering free Internet access as a way to get people in their doors.’ Free and ubiquitous wifi is important because it makes access available to anyone with a wifi enabled device, levels the playing field in a host of ways, and makes wifi based telephony a reality.”

Internet News: “Could 2006 be the year that Ultra Wideband starts to make personal area networks happen in the home for tech-savvy and media-loving consumers? If Freescale, the semi-conductor spin-off of Motorola, has any say, it will. The company has said it hopes to see UWB transmission rates hit a full gigabit per second, and it hopes to get its chipsets in more devices in 2006. Plus, after two wireless networking industry groups, The WiMedia Alliance and the MultiBand OFDM Alliance Special Interest Group (MBOA-SIG), merged in 2005, some of the squabbling over formats and protocols could be streamlined for products to ship. Then, there's that 802.11n high-speed spec for the somewhat competing Wi-Fi wireless networking standard. UWB supporters say both have their place, but that UWB is better-suited for home networking and zipping media from one TV to another device. UWB's transmission rates, at 40 to 50 megabits per second, as well as its ability to support networking via the Bluetooth standard, puts it in a position to make headway in the home in 2006…We also think wireless USB (WUSB) will be the most "visible" new technology of 2006. There are countless billions of peripheral devices connected by USB cables. With WUSB, all those cables could disappear. The WUSB specification which was formalized in 2005 and is backwards compatible with existing USB connections. That means the countless billions of USB peripherals have a simple wireless upgrade path. The first WUSB devices are expected by the second quarter of 2006. Look for the technology to gradually displace Bluetooth and Infrared as the dominant wireless interconnect for personal devices and peripherals.”

David Kirkpatrick in Fortune: “My…prediction is that telcos will become more powerful Internet service providers. Mark Anderson, who writes the Strategic News Service newsletter and has a keen sense of communication trends, says cable companies, telcos, cellphone companies, and other ISPs are becoming generic ‘bit providers’ that will compete solely on how cheaply they can deliver digital content—from phone calls to TV shows. But telcos may have some advantages over the other players. Wolfgang Ziebart, CEO of Infineon, recently told me that the German chipmaker will ramp up production of its so-called VDSL2 chip in early 2006. This chip can send data at the Holy Grail rate of 100 megabits per second over ordinary copper phone wire for distances of more than 600 feet. That may not seem very far, but it represents a much greater capacity to transmit data than has previously been available on copper wires. This will enable phone companies to avoid stringing expensive optical fiber all the way to consumers' home computers. Instead, telcos can install optical fiber cables to hubs and then use traditional pre-existing copper phone lines to connect them to nearby households. Texas Instruments and other chipmakers are working on similar technology.”

Bruce Perens: "Cellular Carriers are Just Carriers. Cellular carriers have chased the dream of value-added content, served through feature phones, as a revenue enhancer. But they're ignoring history: remember the first generation of internet providers? Compuserve, Prodigy, Genie, GNN, and AOL all worked hard to provide unique content and enhance the user experience. They lost out to a second generation of internet providers that were just high-speed data pipes, while content moved to carrier-independent entities like Google and the user experience was engineered by software application providers like Netsape, Microsoft, and eventually the Mozilla project. Edge-enhanced GPRS is already available in most U.S. markets, thanks to the conversion of American cellular infrastructure to GSM. It provides a means to access the global internet and ignore carrier content. And that's what feature-phone users will do."

Tomorrow: Peer Production and Syndication

Related Entries:  [All]
TECH TALK: 2007 Tech Trends: 2006 Review (Part 4) [January 11, 2007]
TECH TALK: 2007 Tech Trends: 2006 Review (Part 3) [January 10, 2007]
TECH TALK: 2007 Tech Trends: 2006 Review (Part 2) [January 9, 2007]
TECH TALK: 2007 Tech Trends: 2006 Review [January 8, 2007]
TECH TALK: 2006 Tech Trends: SaaS, Emerging Markets [January 13, 2006]

Tech Talk | PermaLink | Comments (5)

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Internet Tea Leaves (Sep 2005)
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Transforming Rural India 2 (Jul 2003)
The Discovery of India (Jun 2003)
Transforming Rural India (Mar 2003)
The Rs 5,000 PC Ecosystem (Jan 2003)
Disruptive Bridges (Nov 2002)
India Post: Ideas for Tomorrow (Nov 2002)
Technology's Next Markets (Oct 2002)
Server-based Computing (Jul 2002)
India's Next Decade (Apr 2002)
The Digital Divide (Apr 2002)
The Real Wireless Revolution (Mar 2002)
Envisioning a New India (Jan 2002)
Emerging Technologies, Emerging Markets (Jan 2002)
The Indianised Linux Desktop (Nov 2001)
Mass Market Internet (Nov 2000)

Enterprise Software and SMEs
The Coming Age of ASPs (May 2005)
SMEs and Technology (Oct 2003)
The Death and Rebirth of Email (Aug 2003)
IT's Future (Aug 2003)
Rethinking the Desktop (Sep 2002)
Rethinking Enterprise Software (Jun 2002)
Emerging Enterprises and Emergent Networks (Mar 2002)
Web Services (Nov 2001)
Alt.Software (Oct 2001)
The Intelligent, Real-Time Enterprise (June 2001)
Enterprise Software (Mar 2001)
SME Tech Utility (Feb 2001)
Software and SMEs (Jan 2001)
The Intelligent Enterprise: Integrating CRM, SCM and EIP (Jan 2001)

Information Management
The Emerging Internet (May 2007)
The Now-New-Near Web (Sep 2006)
Mobile Internet (Aug 2006)
Video on the Internet (Jun 2006)
India Internet and Mobile (Feb 2006)
Rethinking Newspapers (Jan 2006)
Web 2.0 (Oct 2005)
The Future of Search (Mar 2005)
Web 2.0 Conference (Oct 2004)
Thinking A New Food Portal (Sep 2004)
Rethinking Search (Jan 2004)
India.com 2.0 (Jan 2004)
The Publish-Subscribe Web (Jun 2003)
Constructing the Memex (May 2003)
RSS, Blogs and Beyond (Feb 2003)
Blogging (Feb 2002)
Harnessing Information (Oct 2001)
News Refinery (May 2001)

Entrepreneurship
When Bad Things Happen (Jan 2007)
Ventures and Capital (Dec 2006)
15 Years as an Entrepreneur (Nov 2006)
Of Blue Oceans and Black Swans (May 2006)
Let's Build a Business (Apr 2006)
The Value of Vision (Mar 2006)
Vision and Worries (Oct 2005)
Bootstrapping a Business (Oct 2005)
India Needs More Entrepreneurs (Aug 2005)
Dotcom Nostalgia (Jun 2005)
When Things Go Wrong (Apr 2005)
My Life as an Entrepreneur (Nov 2004)
An Entrepreneur's Growth Challenge (Sep 2004)
Creating Options (Sep 2004)
From Employee to Entrepreneur (Aug 2004)
A Tale of Two Summers (Aug 2004)
Crucible Experiences (May 2004)
The Company (May 2004)
An Entrepreneur's Attributes (Nov 2003)
An Entrepreneur's Early Days (Sep 2003)
Reflections on Ideas and Entrepreneurship (Jul 2003)
Entrepreneur's Enigmas (Jan 2003)
The Entrepreneur's Delights (Sep 2002)
Life as an Entrepreneur (Oct 2001)
Leadership Lessons from Lagaan (Aug 2001)
Entrepreneurial Learnings (July 2001)
Entrepreneurship (Mar 2001)
The IndiaWorld Story (1997-8)

Abhishek (my son)
Photos
Letter to a Two-Year-Old (Apr 2007)
Father to Son (Apr 2006)
Letter to a 2005 Baby (Jun 2005)
The Making of Abhishek (Jul 2005)

Moreover
Facebook (May 2007)
Doing Education Right (May 2007)
Reflections from a Dubai Trip (Apr 2007)
Creating India's New Cities (Apr 2007)
India's Challenges (Mar 2007)
3GSM 2007 (Feb 2007)
Demo 2007 (Feb 2007)
A Tale of Two Covers (Feb 2007)
3GSM Mumbai (Feb 2007)
2007 Tech Trends (Jan 2007)
The Best of 2006 (Dec 2006)
Best of Tech Talk 2006 (Dec 2006)
Cyworld (Nov 2006)
Two 2.0 Events (Nov 2006)
Two-Sided Markets (Nov 2006)
The Rise of YouTube (Oct 2006)
Gandhigiri (Oct 2006)
Education and Reservation (May 2006)
Four Blog Years (May 2006)
Fooled by Randomness (May 2006)
Blue Ocean Strategy (May 2006)
Revolution on the Roads (Apr 2006)
The MySpace Story (Mar 2006)
A Presentation at PC Forum (Mar 2006)
Extreme Competition (Mar 2006)
3GSM World Congress 2006 (Feb 2006)
DEMO 2006 (Feb 2006)
India Rising (Jan 2006)
2006 Tech Trends (Jan 2006)
The Best of Tech Talk 2005 (Dec 2005)
The Best of 2005 (Dec 2005)
Trains, Planes and Mobiles (Dec 2005)
Peter Drucker: Management's Newton (Nov 2005)
India Empowered (Oct 2005)
Rajasthan Ruminations 2 (Sep 2005)
Building a Better India (Sep 2005)
South Korea's IT839 (Jul 2005)
Shift-Ctrl (Jul 2005)
Best of Future Tech (Feb 2005)
Multi-Model Minds (Feb 2005)
The Best of 2004 (Jan 2005)
On Watching Swades (Jan 2005)
The Best of Tech Talk 2004 (Dec 2004)
India Trends (Dec 2004)
An American Journey (Aug 2004)
Black Swans (Aug 2004)
A Train Journey (Jun 2004)
An Agenda for the Next Government (May 2004)
Two Blog Years (May 2004)
Rajasthan Ruminations (Feb 2004)
Technology and the Indian Elections (Feb 2004)
2003-04 (Dec 2003)
Random Musings (Sep 2003)
Useful Concepts (July 2003)
Dear Non-Resident Indian (July 2003)
Tech's 10X Tsunamis (July 2002)
An Indian in China (Mar 2002)
Disruptive Technologies (Aug 2001)
Innovation (Aug 2001)
Good Books

- My Business Standard columns
- More columns at Tech Samachar

Presentations
- TiE Bangalore (Dec 2004)
- BangaloreIT.com (Nov 2004)
- CIT 2004 (Jan 2004)
- BangaloreIT.com (Nov 2003)
- Pune CSI Open-Source Workshop (Sep 2003)
- Sydney ICT Workshop (Jul 2003)
- Netcore (Mar 2003)
- Emergent Democracy (MP Govt, Feb 2003)
- Vision for Digitally Bridged India (Dec 2002)
- India Post (Nov 2002)
- Open-Source for eGovernance (Oct 2002)
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