HUNTINGTON BEACH, CALIFORNIA: At the Intel Capital CEO Summit 2009 held in California, nearly 600-odd participants–a record turnout–drawn from the global corporate community sported their best smiles. That is grand considering the world is just beginning to crawl out of its worst economic slowdown. Beneath the veneer lie doubt, trepidation and a question mark on whether the turnaround signs will last.
But, that did not dampen the action at the annual confluence of Intel’s portfolio companies, representatives of Fortune 500 firms and small and mid-sized entities. Meetings between Davids and Goliaths, elevator pitches and one-minute pitch power-point sessions at the Summit pointed out the corporate world’s readiness to get into for alliancing and deal-making.
In the keynote address, Intel Capital president Arvind Sodhani, who prefers to call the post-Lehman world as the “new economy,” said: “Technology will lead the recovery. Innovation does not stop during downturn or periods of slowdown.”
He added that, “the second half of 2008 has been horrible. There were concerns about the VC model being broken and startup companies finding it extremely difficult to raise finances.”
In the ‘new economy,’ where the BRIC nations are experiencing faster rates of growth compared to the US, there are huge opportunities emerging in the developing world. “There are also equal challenges. Technologies have to be customised to be deployed there,” Sodhani said.
From Intel Capital’s perspective, there is no slowdown in terms of investments. In fact, Sodhani asserts, “we are not wavering and have continued to support our portfolio companies”. Intel Capital made some follow on investments in portfolio companies in the downturn. In 2008, Intel Capital invested about $1.59 billion in 169 investments with approximately 62% of funds (excluding Clearwire) invested outside North America. There were about 10 acquisitions in Intel Capital’s portfolio and about two companies successfully concluded an IPO.
In January 2009, Intel Capital announced investments totaling $23 million in India which included mobile services company One97 Communications, online B2B marketplace IndiaMART.com and vocational training institute Global Talent Track. In 2008, Intel Capital announced $17 million investment in three Indian companies – Yatra.com, a leading online travel portal, BuzzInTown.com, an events-oriented social network extensible across web and mobile platforms and Emnet Samsara Media Pvt. Ltd., an out-of-home (OOH) advertising company
On the future sector focus, Intel Capital will look at the cleantech space with great interest. And, surprisingly, the accent on cleantech is thanks to an over-powering trend of social networking in the world. If 2007 was the year of the mobile theme, Sodhani foresees a tsunami of social networks which is “the way we communicate now.”
Referring to a video on the “You Tube- Is social media a fad,” Sodhani pointed out the fact that if Facebook were a country, it would be the fourth largest in the world.
Such huge traffic of content and communication would have a “humungous repercussion on the cloud, data centres and mobile devices”. So, obviously, electricity, its optimisation and efficiency assumes great significance. Sodhani hinted that energy efficiency as one of their key focus areas and, as a fallout, cleantech becomes invariably important. Going forward, companies will have to look at creating new ways of power generation and optimising it.
(Shrija Agrawal attended the event held in Huntington Beach, California on Intel Capital’s hospitality)