Infosys chief mentor N R Narayana Murthy has chosen Arjun Ramegowda Narayanswamy– who is in his late 20s and from Massachusetts Institute of Technology–to steer his $129-million venture capital vehicle Catamaran, symbolically named after a sailboat known for its lightness and agility.
By choosing youthful energy over experience, Murthy may have sprung a surprise on many industry watchers. VCCircle has learnt that Narayanswamy holds degrees in computer science engineering from MIT and has had a one-and-half-year-stint with Bain Capital in Boston. Prior to that, Narayanswamy had an entrepreneurial stint when he started a venture in the mobile communication space.
VCCircle could not reach Narayanswamy to confirm this information. An e-mail sent to Narayana Murthy’s office did not elicit any response at the time of filing this story.
One source, who requested not to be quoted, said Narayanswamy knows Murthy’s two children for some years now.
The assignment is certain to keep Narayanswamy in the limelight as the launch of Catamaran and Murthy’s selection of the team to lead his venture capital foray is being closely tracked by his peers and the financial community. A source said, Narayanswamy was already at work to put up a team of half a dozen people who will get the fund sailing.
A venture capital industry veteran, who did not wish to be named, said, venture investing is always a team effort requiring various complementary skills such as deal-making capabilities, negotiating, deal sourcing and structuring. The right combination is what makes a fund click, he adds.
People, who are familiar with Murthy’s style of functioning, say, he is a very hands-on leader and would give his time and energy to the new vehicle. It is not clear if Catamaran will indeed be his second active innings, after creating a giant like Infosys. Another source did not rule out the possibility of other NRN family members being on the investment committee, while the fund will be run by an independent professional team.
Catamaran will be a sector-agnostic fund, and, according to sources familiar with the initiative, the fund has already started seeing investment proposals and has zeroed in on the initial transaction.
“For NRN, Catamaran may be too small a shoe size to fit into,” says an industry player, requesting anonymity. But, creating sizable and game-changing enterprises from zero revenue is no mean task and could perhaps be more fulfilling for Murthy, said another industry veteran. What most people agree with is that Murthy’s entry into the VC business, although with his personal wealth, will be a clear differentiator in this space going by his track record. For most entrepreneurs who may be preparing an elevator pitch for Catamaran, having Murthy as a mentor would be like a dream come true.
It was only in October 2009 when Murthy sold shares worth Rs 174.3 crore ($37 million) in Infosys to set up an early stage VC fund Catamaran. A month later, wife Sudha Murthy sold shares worth Rs 430 crore or $92 million to back her husband’s plan. The fund corpus stands at $129 million. Interestingly, in 1981, it was Sudha Murthy’s savings of Rs 10,000 that was a big contribution to the Infosys story.
“The Venture Capital Fund will encourage and support young entrepreneurs having brilliant business ideas. The Fund will primarily invest in India and may on a case-to-case basis consider investing overseas,” an earlier statement had said. The VC fund will look at areas like healthcare, retail and technology.
Venture capital industry trackers say, Catamaran may be more focused on the growth capital requirements of running start-ups rather than seeding the ideas. “At $129 million, it is not a small VC fund, and managing the fund may not allow too many seed funding deals,” says a partner at another VC fund, who requested anonymity.
Murthy joins the long list of Indian technology entrepreneurs-turned-investors. His associate and co-founder of Infosys, NS Raghavan, who quit the firm as joint MD, now runs Nadathur Investments and early stage venture capital firm Ojas Venture Partners. Another Indian tech czar Azim Premji has a personal investment company called PremjiInvest, which has a corpus of $1 billion.