Sequoia will pump $20 mn into George Zacharias’ start-up

Sequoia will pump $20 mn into George Zacharias’ start-up
Comment E-mail Print Share
First Published: Thu, Aug 09 2007. 01 02 AM IST
Updated: Thu, Aug 09 2007. 01 02 AM IST
Sequoia Capital India, the Bangalore-based venture capital investor that manages $750 million (Rs3,045 crore) in India-dedicated capital, has closed a deal to invest $20 million in former Yahoo India managing director George Zacharias’ yet-to-be-launched remote infrastructure management start-up.
Sequoia India managing director K.P. Balaraj was not available for comment, but a person familiar with the developments at Sequoia said that the funds would be invested in tranches over a 12-month period. “The first tranche will be used to finance an acquisition in the US,” said the person who did not want to be named.
The start-up’s founding team of six to seven people, led by Zacharias, has been drawn largely from Yahoo India and Sify Ltd. Zacharias formally stepped down from Yahoo India on Monday after a two-year stint with the Sunnyvale-based Internet company’s local arm. The start-up will be based either in Chennai or Bangalore and will address the mid-market segment primarily in the US and the UK. Details on the company’s proposed scale of operations, in terms of headcount and delivery centres, were not available, but the outfit is not expected to be headcount-driven and will focus more on proprietary software-led delivery solutions, said another person familiar with the developments, on condition of anonymity.
Some of the larger players currently present in India in the remote infrastructure management space include IBM Corp., Accenture, Electronic Data Systems Corp., Wipro Technologies Ltd and HCL Technologies Ltd.
For Sequoia, which has been a prominent seed and early-stage investor here—since 2001—in the specialized outsourcing space, which includes knowledge process outsourcing, the deal does not constitute a typical start-up investment in terms of its size. Such deals normally range between $100,000 and $10 million. However, the larger commitment, in this case, was needed because of the “seniority of the founding team”, said the person familiar with the developments at Sequoia. Some of its other notable early-stage investments in the outsourcing space include Pangea3 LLC. in Mumbai, and marketRx Inc. and Indecomm Global Services in Bangalore. It is also a minority shareholder in Mumbai-based business process outsourcer Firstsource Solutions Ltd.
Sequoia’s investment in Zacharias’ start-up, incidentally, is the second such deal that the Indian start-up market has seen in recent months.
Earlier, Chennai-based Anantara Solutions Pvt. Ltd, founded this year by a group of former senior executives from Satyam Computer Services, received $6.5 million from a consortium of VCs, led by Bangalore-based Helion Venture Partners. Anantara provides outsourced, IT-driven business consulting services to overseas customers.
Comment E-mail Print Share
First Published: Thu, Aug 09 2007. 01 02 AM IST