Bangalore-based NEA IndoUS Ventures set up a $189 million (Rs745 crore) fund in July last year. Formed by a trio of past entrepreneurs—Vinod Dham, Vani Kola and Kumar Shiralagi—the firm has invested in nine companies, including semiconductor design company InSilica Inc. and telecom component manufacturer Microqual Techno Pvt. Ltd. Last week, the firm invested $2.5 million in Chennai-based Bay Talkitec (P) Ltd, a mobile value-added services (VAS) provider that started as an IVRS (interactive voice recognition systems) company in 1991. Managing director Kumar Shiralagi talks to Mint about the company’s latest investment and plans for the year ahead. Edited excerpts:
Most VCs, including NEA IndoUS Ventures, have begun investing in niche mobile VAS opportunities such as mobile advertising or mobile payment, and funding first-generation ‘horizontal’ play is believed to be saturated. Why have you invested in Bay Talkitec now?
Managing director Kumar Shiralagi says the company will continue to invest in tech and tech-enabled services companies
Bay Talkitec is an old company, but they are working on new services in this space. The company was started 17 years ago as an IVR platform for customers such as Bharat Sanchar Nigam Ltd and the railways. But it has evolved into a mobile VAS company with some innovative solutions. They offer video SMS in Singapore and 3G greetings in some markets overseas, for example. Also, it has an experienced founding team, which we liked.
What sectors will you look at this year?
We will continue to invest in technology and technology-enabled services companies. Given that all three partners come from an operational and entrepreneurial background, we understand those sectors best. We are also looking at some opportunities in retail.
Are you looking at growth opportunities?
We like to invest across three stages—incubation, early stage and growth. We define growth as deals in excess of $5 million. We have done a couple of deals at this stage, such as ISGN Technologies and Microqual. In the life cycle of a company, we would like to typically invest $8-10 million.
How many companies have you incubated?
Three, at incubation stage. We invested in Minekey early on, though the technology was born on the IIT campus. We have incubated KRK Labs in media and another in Internet. Typically, we invest less than $2 million in such deals, but we are the sole investors and we are more involved in the company.
Will you do more such deals this year?
We are looking at a few more deals. We will incubate companies, but selectively.