Global venture capital firm Norwest Venture Partners managing partner Promod Haque bet on India’s technology companies in 2001, at a time when the country was vastly unknown to the majority of the US Silicon Valley’s venture capital community. Haque, along with members of his team, started visiting India two or three times a year to test the Palo Alto-based firm’s initial investment thesis for this market—Indo-US cross border technology start-ups. The US market, at the time, was just going into a recession, and building start-ups in the Valley had become an expensive proposition. Haque saw the potential to leverage India’s low-cost and skilled technology pool as back-end support for Silicon Valley start-ups.
Since then, Norwest has invested $300 million (Rs1,218 crore) in 22 cross-border technology companies and five pure Indian companies—Sulekha.com, Yatra.com, Mobile2win, Adventity and Persistent Systems. Having established a track record and presence that has led more than 10 Valley-based firms to troop into the country in the last 12 months, Haque is now ready to put the second phase of Norwest’s India game plan into play. It is moving managing director Niren Shah from the Valley to Mumbai, which will be its India headquarters. Shah, who moves in January, will be flanked by two more managing directors. The decision to set up an on-ground team, after nearly five years of offshore investing, follows the firm’s stated purpose to drive up direct investments in India from the $650 million NVP X fund, which was raised in 2006. It invests $10-15 million over the life of a company. About 10% of NVP’s current portfolio of 60 companies are now in India and this will grow significantly, promises Haque, who spoke to Mint about how he wants to play round 2 in India. Edited excerpts:
How much of NVP X has been deployed? How much will be invested here?
About $100 million has been deployed globally. The US is obviously very large. If you look at dollars, India is No 2 and Israel is pretty close.
What sectors are you looking at?
We see three or four different kinds of opportunities in India. One is the consumer Internet space in general and includes mobile Internet. We have two or
India Round 2: Norwest Venture’s managing partner Promod Haque says product innovation in India is still in its infancy
three bets in that space such as Yatra.com and Sulekha. The reason why it continues to be an interesting sector is the mobile aspect to it. Mobile Internet will be bigger here than broadband, PC-based Internet. The second area of interest is what we call second generation services companies, not basic IT-enabled services because we believe that space is taken. But companies that are more in the area of product development, such as Persistent Systems, and KPOs (knowledge process outsourcing).