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.

CNBC-TV18 has an interview with Michael Moritz (top) and Sumir Chadha (below), the partners with Sequoia Capital (I missed the live show). Moritz, an ex-journalist with Time magazine, joined Sequoia in 1986. He is known for spotting Google.

Chadha started Westbridge Capital Partners, an India-focused venture capital fund, in 1999, which got merged with Sequoia Capital last year.

Both Moritz and Chadha are upbeat about making investments in India across the sectors and stages. A couple of points of note on the internet media. According to Chadha, there aren't enough online media inventory. He says, "The advertisers are fighting over the immediate amount of inventory and today there are not enough web pages. So, the real problem in the internet today is lack of connections and lack of users and we really need to see the government push some major regulations in terms of broadband reforms to get that going. But advertisers are very excited about internet in India today. In fact, a lot of our companies are seeing very strong ad sales and we expect that to continue."

Moritz adds: "As broadband proliferates in India and mobile telephony expands, internet-based media companies are going to be much more of a force in this country as well." He said that a lot of big media companies like Dow Jones missed the internet bus, and they will have to pay the cost now.

Meanwhile, Chadha dismissed that Minglebox and Fropper are two competing properties. Sequoia Capital India recently invested in social networking site Minglebox, while it already had investment in People Group, which owns Shaadi.com and the dating site-turned-social networking site Fropper. He says: "We do not back competitors, so we look at these properties (Minglebox and Fropper) even that they may appear from the outside to be competitive - they have very different focuses, very different user bases and we are seeing a lot of growth in that sector."

Indian market regulator Securities and Exchange Board of India has issued foreign investment norms for venture capital funds who have registered with the body. First, the SEBI-registered VC funds are allowed to invest only in those companies which have an Indian connection, for example, the companies which have back office operations in India. Besides, the funds cannot invest more than 10 per cent of their corpus in these companies. So if you are $150 million fund, you can't invest more than $15 million in an American company which uses India as a back office.

And SEBI will allow only a total of $500 million a year to be invested abroad. So VC funds have to approach the regulator for approval, and they will be given permission on a first cum first basis till they exhaust the $500-million limit. The guidelines were issued on Thursday. These norms apply only to those funds who are registered with SEBI, and not for those come via Mauritius or Cyprus.

In April, India's central bank Reserve Bank of India (RBI) had approved the proposal of VCFs investing in equity and equity-linked instruments in offshore venture capital undertakings (companies) subject to an overall limit of $500 million and applicable SEBI regulations.

Currently, there are some about 90 domestic and 80 foreign venture capital funds registered with SEBI.

See the full announcement below:

This just in. Nexus India Capital, the $100-million venture capital fund, has invested over Rs 10 crore or $2.5 million in digital map data company CE Info Systems. It runs MapMyIndia.com, an interactive online map service.

This is the second institutional investment for CE Infosystems, a company set up by entrepreneur couple Rakesh and Rashmi Verma in 1992. In April 2007, it had received an undisclosed investment from Sherpalo, the VC fund of Ram Shriram, and Kleiner Perkins.

Delhi-based CE Infosystems provides services and solutions based on geographic information systems and location-based business intelligence. It claims to be the single largest repository of digital spatial data of India. A press release said that the company released the first version of nationwide GPS-based road network navigable maps in early 2007, which can be used on multiple media including the internet, car navigation, mobile navigation and several other location-based and GIS applications targeting the needs of consumers and enterprises.

The company has also partnered with Yahoo India, Wayfinder, and Airtel to offer mapping services to the internet and mobile users in the country. Suvir Sujan, Managing Director, Nexus India Capital, has joined the board of the company.

Nexus' current portfolio includes mobile VAS company Mobile2win, open source web collaboration software company Dim Dim, and voice SMS provider Kirusa.

Earlier, in February 2007, Bennett, Coleman & Company had invested in Hyderabad-based SatNav Technologies, a company in the similar space. This company was founded by a group of ex-Satyamites led by Amit Prasad, who is the founder MD & CEO.

Related:

Kleiner, Sherpalo Invest In GIS Company CE Infosystems

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.

Four Interactive, a stealth company funded by Matrix Partners India about six months ago, recently unveiled its local information and social review website AskLaila. The company is building local information on food, events, lifestyle and shopping etc from scratch and making it available for search from its own database (instead of the world wide web). The content is supplemented by reviews too.

Konduri is a serial entrepreneur as he set up and sold companies like Zephyr Software (to Infospace for $40 million) and Cogniti, Inc. Adukoorie has been a veteran internet professional, and has set up MSN portal in six countries including India and South East Asia as a regional head for the company. Both have previously worked at Microsoft and Wipro. [See the team picture - from left to right: Kiran Konduri, Shriram Adukoorie, the co-founders, and Bal Krishn Birla, the CTO]. VC Circle chats up with Shriram Adukoorie on the idea behind AskLaila.

What has been the response to the launch of AskLaila so far?

It has been fantastic. There is at least one comment or reaction in my inbox every five minutes.

Why did you go stealth on this product?

It was one thing to make a statement and come up with a product with all fanfare. But both of us (he and Kiran Konduri) wanted to be sure (of what they were coming up with). In the last few months, both of us spent a lot of time discussing where the opportunity lied. Our question was what was the gap existing in the Indian consumer internet space.

I have seen the internet space evolving in India over time. Initially, it was bollywood, cricket and news. Then came in classifieds businesses like matrimonial, jobs and so on. So our quest was to see if there was a gap.

We found a gap in the local information space. A consumer cannot find local information on the Internet in India. There is high level information available, but not the actionable, local level information. Also, even if there is some information available, most of them are incorrect. So the idea was to launch a site for local information. For instance, which Chinese restaurant in your locality delivers food at doorstep, or which restaurant offered children’s play area, or where you can go swimming, and so on.

Also, people go to such places based on references or friend’s recommendations. Not one piece of information is good enough for people to take action. So we need reviews. We also decided to build the entire content ourselves simply because there is no correct information available on the web.

So how did you build out Laila?

First we spent a lot of time figuring out the coding piece. Then we had to decide what sort of content has to go in. Both Kiran and I are business people. So we had to even debate if a local medical shop listing should contain its picture too. We did make a lot of mistakes, but the last six months were well-spent.

The accuracy of data is going to be a big focus, besides social reviews. It’s a combination people will look for in making local purchases.

You have a gigantic task of building out content. As you scale to other cities, how do you plan to do it?

As we worked on Bangalore, our worry was the scalability problem. But we figured that out. We have a large outsourced team for content – about 75 people. They work exclusively on the data side. Now we are planning to launch in six metro cities (Mumbai and Delhi first) in the next 12 months.

What is your business model?

The local advertising market has never grown on the internet in India. There are tons of potential local advertisers. However, right now we are not taking any advertisements. It’s sufficient to say that we will be out in the market as we are ready.

How do you rate the competition in various forms in this space – like Burrp, Guruji.com, JustDial and so on?

We are the only company which is covering the local information space across all content categories (Ed: Burrp currently offers only restaurant reviews, while Guruji offers third party database for search, JustDial is a local directory search company). Our idea is to become a recommendation site, and not just a directory (like JustDial). Currently, consumers are getting only answers to two out of 10 questions they ask. If we can answer six to eight questions out of 10 they ask, then we have made it.

GloriOil, a Houston, Texas-based biotechnology company backed by India's The Energy Research Institute (TERI), has raised $10 million in financing from Kleiner Perkins Caufield & Byers and a private investment firm GTI Group, which co-founded and seeded the company. GloriOil has developed a technology which improves the recovery efficiency and also reduce the operating costs of oil fields. The company has successfully applied biotechnology in mature fields in the Texas Panhandle and West Texas in the US.

The India Connection

GloriOil's patented Enhanced Oil Recovery by Microbial Consortia (EORMC) process was in development for 10 years at the Delhi-based TERI, which was earlier called Tata Energy Research Institute. The value proposition GloriOil gives is that it would help increase oil production while lowering the producer's lifting costs. According to KPCB Partner Joseph Lacob, GloriOil's technology "will deliver much-needed improvements in recovery efficiency to many of the world's 30,000 producing oil and gas fields".

TERI is also one of the shareholders in the privately-held GloriOil, which was co-founded by GTI in 2005. But its origins go back to 1997 when India's ONGC commissioned TERI to develop a microbial enhanced oil recovery technology to improve the production of its mature fields. Over the next seven years, "TERI scientists worked to advance a technology that has been in marginal use for over 50 years. Between 2001 and 2004 their technical developments were used on 25 wells in 3 fields in India with extraordinary results. The success of this pilot work led to bigger MEOR programs in India, and to the birth of GloriOil," says the company website.

Will ONGC get to use the technology free of cost is the question now?

It seems Sequoia Capital India is backing George Zacharias, former Managing Director of Yahoo India, for a remote infrastructure management startup. This bit of news is however yet to confirmed by either Sequoia or Zacharias. VC Circle has emailed KP Balaraj, Managing Director of Sequoia in India, to confirm the news.

Zacharias himself has told Agencyfaqs that he is planning an IT startup, and nothing in consumer internet space. He is being quoted by the portal as saying: “The time is right to do one’s own thing. We (the founding group) are in the process of incorporating a company in the IT space.” The new venture would be unveiled in a few weeks, and it will be a technology company, the portal reported. Sources said that a few of his ex-colleagues at Yahoo India and Sify too are expected to join him.

Meanwhile, a commenter on this site also notes that Zacharias is backed by Sequoia, and it's not a consumer internet startup.

Sequoia has done a similar thing earlier too - picking the entrepreneur first and then back his venture whatever it's. They backed Naresh Ponnapa, a former top honcho of Hindustan Lever, even before the business plan for Indecomm Global Services was written. Now the Bangalore-based company employs about 1,400 people in business process services area such as office automation and so on.

Remote infrastructure management seems to be a good opportunity - considered a $70 billion opportunity, and there is still scope for more startups in that area. Only yesterday, Wipro announced the acquisition of an IT infrastructure management company Infocrossing for $600 million. In India, there are several companies like HCL Technologies (through HCL ISD) and Microland present in this area.

Here is an interesting presentation on raising venture capital. Check this out - will not take 10 minutes. (Via Mahesh).