VCCircle

Probably for lack of interesting startups in the country, VC funds are these days conceiving business plans themselves and looking for managers to run the ventures. IDG Ventures India is seeking a top-end software executive as CEO for a startup it has conceived and funded in the managed security services space. Sudhir Sethi, Managing Partner of IDG Ventures India, has put out a post on his LinkedIn account for the same. Techgigger has more details.

Hat tip to VC Circle reader Pukhraj Singh. He writes in: "It's a services-based company. This could be really interesting as only a few big outsourcing players had ventured into managed security services space, but due to the confidentiality and legal issues surrounding this industry, things didn't work out well. Outsourcing security has been under a constant debate and is considered to be lagging behind the mainstream security market by 3-4 years. Would be interesting to see how they work all this out and cap on the opportunity."

By the way, the job details are here:

--Build leadership position in a global service niche play for managed security services

--Achieve revenue of $100 million in 6 years with a PAT of 20%

--Build ecosystem for innovators, application developers, and developer community and solution providers

--CEO will report to board

--Interact extensively with the board in ascertaining and in many ways evolving the business plans

--An engineer-MBA from a reputed institute would be the education background

--Attractive compensation plus significant options

--Location: Bangalore

--Targeted joining date is Oct 2007

Apply here.

Mphasis founder Jerry Rao is backing a legal process outsourcing company in which his son is also reportedly part of. Rao has made an angel investment in Bangalore-based JuriMatrix, an LPO, reports Business Standard.

The company is apparently in the process of raising $12 million in venture capital. It's founded by Sajan Poovayya, the Founder and Managing Partner of Poovayya and Co., a full service law firm based in Bangalore. He is no stranger to the legal circles in India, as he advises tech biggies in Bangalore. Vijay Rao, a graduate from graduate of Dartmouth College in the US, is Director, Marketing.

With Jerry Rao backing the venture and playing the role of non-executive chairman, and with names like Rajat Gupta, former global CEO of McKinsey, and Hema Ravichandar, former HR head of Infosys, acting as advisors, it's only a question of time when JuriMatrix landed funding.

Delhi-based Band of Angels is going national. Its first step was to rename itself as Indian Angel Network. It has got a new website URL too - IndianAngelNetwork.com. Padmaja Ruparel, the executive director of Indian Angel Network, told VC Circle that they have launched operations in Bangalore already. Their next target is Mumbai, and will spread to other cities too, truly making it a national angel network.

When asked if there was any pressure from the original Band Of Angels in Silicon Valley about the name, Ruparel replied in the negative. However, she said it was likely many (potential) members got confused with the identical names. She said the idea was that they wanted the organisation to get a "pan-India" character. Moreover, it's actually a network and not a fund as many entrepreneurs confuse it to be.

The network currently has some 60 members like Jerry Rao, Saurabh Srivastava, Pramod Bhasin, Raman Roy, Rajiv Luthra, Pradeep Gupta, Alok Mittal, Ranjit Shastri and so on. It also has institutional members like IBM, SIDBI, Naukri, Greylock Partners, and Google.

The network has so far invested in seven companies.

Another prominent angel investing group is Mumbai Angels. They are however focused on investing in early stage companies in Mumbai.

On Tuesday, VC Circle had reported that Sequoia Capital India had most likely invested in former Yahoo India MD George Zacharias' new remote infrastructure management startup. Mint today reports that Sequoia would have committed about $20 million in Zacharias's yet-to-be-named IT company. The capital would be invested over the next 12 months, which includes the funding of an acquisition of a US company too, Mint reports quoting sources.

Sources told VC Circle that C.R. Srinivasan, former head of VSNL - Singapore, might be joining Zacharias in the new IT venture, besides a few ex-colleagues of his from Sify and Yahoo.

How did Sequoia zero in on Zacharias? Sources attribute it to the connection with ex-Sify CEO R Ramaraj, who is currently an adviser to Sequoia. Zacharias was hired as COO of Sify by Ramaraj. Some industry sources suggest that Ramaraj-Zacharias combination could even buy out the data center business of Sify. Only if Raju Vegesna-owned Sify is ready to sell. A two-third of revenues of Sify come from enterprise services like data centre and hosting. The idea, however, is not far-fetched.

Exclusive: Mumbai Angels, an independent group of angel investors based in the city, has invested in an unnamed airline ticketing company, which is expected to launch a distressed inventory sales engine very soon. This will be the fourth investment of Mumbai Angels in the last six months.

The group had earlier invested in companies like mKhoj, a mobile search firm, Madhouse.in, a DVD rental company (which it exited recently when the company was sold to Seventymm.com), and NetElixir, a US-based pay-per-click search marketing firm.

Sources close to Mumbai Angels told VC Circle that it's an existing travel portal, but will be soon converting itself into an online ticketing company that sells unsold, last minute inventory (or distressed inventory). Probably none of the travel portals offers such a service as of now. Indiatimes.com has an auction system, but it still does not offer a complete bouquet of distressed inventory web fares. Competition can come from airline websites, though. For instance, the state-owned domestic carrier Indian recently launched spot fares for executive class. Also, now you can book tickets up to two hours before departure on Indian.

But the idea of aggregating such last minute deals is a good thing.

Also read:

Meet Mumbai's Angels

Mumbai-based ambulance startup - popularly known as DIAL 1298 FOR AMBULANCE - has received $1.5 million funding from New York's Acumen Fund. Acumen is a nonprofit venture fund which invests in "sustainable, scalable solutions addressing poverty in South Asia and Africa".

Acumen has made the investment in Ziqitza Healthcare Limited (ZHL), which owns the ambulance service. It plans to roll out a nationwide network of life support ambulance service, essentially filling in a gap in the emergency medical support in Indian cities. The investment will be used to scale from the 10 ambulances it currently operates (including 2 franchisee-based) up to 70 ambulances in Mumbai by March 2009. Once the expansion is complete, 1298 expects to be reaching patients in Mumbai within 15 minutes of receiving a call for an ambulance.

"Acumen Fund is committed to identifying and supporting local entrepreneurs who are focusing on bringing critical services to the world's poor," Acumen Fund CEO Jacqueline Novogratz said in a statement.

1298 is the probably the first for-profit, private sector ambulance service in India. In Mumbai, people can access ambulance services by dialing a common telephone no. 1298 from any telecom service provider. The services include 1) Basic Life Support (BLS) - to administer oxygen, treat splint fractures, control bleeding and perform CPR (cardiopulmonary resuscitation) in cases of cardiac arrest. 2) Advanced Life Support (ALS) - it has sophisticated equipment to monitor, shock and pace the patient's heart. 3) Patient Transport Service (PTS) - provision of transport for the patient from hospital to hospital or other destinations in a non-emergency situation.

It has a unique business model. It employs a sliding scale pricing system based on the level of hospital to which a patient is taken. Those who go to free public hospitals do not pay, while those who ask to be taken to Mumbai's more expensive hospitals pay accordingly.

1298 covers costs through a combination of the premium payments made by half its clients and by managing capital costs. ZHL also uses a mix of grants, equity and loans to grow its service. The company's CEO is Shaffi Mather.

The trade body for Indian IT software and services industry, Nasscom, plans an India Innovation Fund which will provide angel funding to technology start-ups, says a report. The fund will have an initial corpus of Rs 100 crore ($25 million), which could be increased to Rs 150-200 crore ($37.5-50 million) in the next two years.

Nasscom plans to set up the fund through a public-private partnership. It will be managed by professional fund managers, while the government's role will be limited (why government at all when Nasscom can do it alone?). Apparently the fund will allow private investors to acquire stakes in the professionally-managed PPP fund.

Kiran Karnik, president, Nasscom, has been quoted as saying: "We want this fund to concentrate on start-up firms focusing on innovating technologies. We are not looking at stage-B funding for somebody who is already established and looking at further growth."

The fund will be raised from contributions from across the industry, financial institutions and companies. Karnik said Nasscom is talking to institutions like ICICI too.

A Boston Consulting Group-Nasscom report on innovation - Indian Innovation Report 2007 - said by focusing on innovations, Indian IT/ITeS firms could target a potential revenue of $175 billion by 2012 against the projected revenue of $124 billion. The industry had registered revenues of $39.6 billion last year.

Indian Innovation Report 2007

The BCG-Nasscom report on innovation in Indian IT industry found the following problems (see release)

Problems:

# Insufficient mentoring and networking support for start-ups and entrepreneurs

# Lack of entrepreneurs focused on IP development in emerging technologies

# Lack of knowledge sharing between IT-ITES firms and key user industries

# Severe lack of funding at the seed / start-up stage

# No platforms for all stakeholders to interact with each other

# No market-place for innovation trading in India

# Tenuous partnership between industry and academia

# Lack of meaningful collaborations between industry and research institutes

What the report suggests:

1. Scale up existing innovation initiatives

2. Set up an ‘Indi Innovation Framework’- a. Indi Innovation Certification Program; b. India Innovation Fund; c. Thematic Innovation Platforms

3. Government should create a National Innovation Policy; establish a National Innovation Commission

4. Establish Innovation clusters of research institutes, academia and industry

5. Government should implement bold changes in policies related to innovation such as patents, business environment, venture capital and commercialization of domestic technology

6. Collaborate with international educational institutes to increase quality of local research

Search engine giant Google is spreading its wings in the Indian investing business. Now the technology giant has joined as one of the institutional members of Delhi's Band of Angels (BOA), reports Business Standard. Google had recently acquired 30 per cent units of Ventureast TeNet Fund II for Rs 15 crore or $3.75 million. Google had also previously invested as a limited partner in two early stage funds - Erasmic Venture Fund and Seed Fund.

BOA (see an earlier article of mine in Business Today for details - in PDF) is a network of high networth individuals, experienced entrepreneurs, and top technology executives, who will individually invest in startups selected by the forum. BOA is not a fund, so the members do not make an investment in BOA, they directly put in money in their individual capacity in startups. BOA essentially works as an organised platform in sourcing the deals, due diligence, and in forming an investing syndicate.

It has two kinds of membership - individual and institutional. Among the institutional members, besides Google, there are others like jobs portal Naukri.com, Lightspeed Venture Partners, Punjab Venture Capital and SIDBI Ventures.

By joining BOA, Google will also get access to the proposals that flow into the angel investing forum. It's definitely a nice idea. Band of Angels has some 50 individual members like Saurabh Srivastava of Xansa, Alok Mittal of Canaan Partners, Pramod Bhasin of Genpact, Raman Roy of Quatrro, and Jerry Rao of Mphasis.

BOA has invested in companies such as Knowcross (a hotel management software company), Sanshadow Consultants (IPR consultancy) and DVD rental company Madhouse (which it exited recently), to name a few.

Related:

Google Acquires 30% Units In Ventureast TeNet Fund II For $3.75 Million

Google Takes An LP Approach In India; Invests In Erasmic And Seedfund

Those who are familiar with tech startup scene in India may have heard about Proto.in. It's a startup showcase where entrepreneurs and a few venture capitalists come together.

Proto had its second event in Chennai last week. Some 22 statups who got shortlisted were given six minutes each to make a presentation to the audience which included VCs, media and entrepreneurs.

Watblog has details about the startups who made their pitch to the VCs. The VCs who were seen at the event included Alok Mittal of Canaan Partners, Rahul Khanna of Cleartsone Ventures, Mahesh Murthy of Seed Fund, and so on. It remains to be seen if there were any fundable ideas at Proto at this time (some of those who presented included Nadathur Holdings funded-Ziva and Yahoo-backed Tyroo) .

Here is an interesting bit of information from the list of foreign direct investment applications approved by the Indian government. Google Holdings Pte Ltd, Singapore, has acquired 30 per cent units of Ventureast TeNet Fund II, a SEBI registered venture capital fund, for Rs 15 crore ($3.75 million).

Ventureast TeNet Fund is managed by Ventureast Fund Advisors India Ltd. The fund began with a corpus of $15 million with a mandate to finance start-ups in the telecom and IT industries. Ray Stata, Chairman and co-founder of Analog Devices of the US, had invested $10 million alone in Fund I. The TeNet group of IIT, Chennai, is the technology advisor, while Sarath Naru of APIDC is one of the co-founders of the fund. It typically will invest $2.5 million $10 million in an early stage venture.

With Google acquiring 30 per cent in Fund II for $3.75 million, the size of the fund II is likely to be $12.5 million.

This is Google's third investment in Indian venture capital funds. It had earlier invested undisclosed amounts in Mumbai-based Seed Fund and in Bangalore-based Erasmic Fund.

Related:

Google Takes An LP Approach In India; Invests In Erasmic And Seedfund