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Picks from India’s start-up landscape

Picks from India’s start-up landscape
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First Published: Tue, Jun 23 2009. 12 25 AM IST

Spectacular returns: (from left) Helion Venture partner Kanwaljit Singh (Madhu Kapparath / Mint) and Draper Fisher Jurvetson India executive director Mohanjit Jolly (Hemant Mishra / Mint)
Spectacular returns: (from left) Helion Venture partner Kanwaljit Singh (Madhu Kapparath / Mint) and Draper Fisher Jurvetson India executive director Mohanjit Jolly (Hemant Mishra / Mint)
Updated: Tue, Jun 23 2009. 12 25 AM IST
Bangalore: It is every venture capital, or VC, manager’s dream to have a hidden Google Inc. in his or her portfolio. While such a huge business still seems to be far away for India, there are several promising start-ups in VC portfolios here that managers expect will give them spectacular returns.
Although most investors shy away from picking their favourites among their portfolio companies, here is a list of firms that six VC managers feel will shine bright in the next two-three years.
Spectacular returns: (from left) Helion Venture partner Kanwaljit Singh (Madhu Kapparath / Mint) and Draper Fisher Jurvetson India executive director Mohanjit Jolly (Hemant Mishra / Mint)
JiGrahak Mobility Solutions (P) Ltd
What does it do: Ngpay is the brand name of a mobile commerce (or a virtual mall) service provided by JiGrahak. There are 80-plus merchants already on board, including large companies such as Kingfisher Airlines Ltd, HDFC Bank Ltd, and card and gift retailer Archies Ltd, in addition to bill payment services for most telecom firms and utilities in metros and other cities. The firm has at least a quarter of a million registered users and transactions (sum is undisclosed) are increasing.
Investors: Helion Venture Partners
Likely exit: Initial public offering (IPO)
Why it is hot: Mobile phone is increasingly—albeit, slowly—becoming the device of choice for data services in India. It is poised for even deeper penetration in the smaller markets. “Due to lack of Internet penetration, the mobile phone could leapfrog and become the default device for e-commerce in the next few years,” says Kanwaljit Singh, managing director, Helion Venture Partners.
Yatra Online Pvt Ltd
What does it do: Yatra is an online travel company that provides information, pricing, availability and booking facility for air travel, hotels, buses and car rentals across 5,000 cities around the globe.
Investors: Norwest Venture Partners, Intel Capital, Reliance Capital, TV18 Group
Likely exit: IPO
Norwest Venture Partners managing partner Promod Haque. The VC managers expect to get high returns from some of their investments.Hemant Mishra / Mint
Why it is hot: Yatra will do well because of the market in which it is playing—a rising middle class spending increasingly on travel—particularly as the markets rebound in the country. Yatra has been very focused on building on its vision to become the largest multi-channel travel provider serving the Indian market, says Promod Haque, managing partner, Norwest Venture Partners, adding that the firm has garnered a 35% share of the online travel segment.
Café Coffee Day (CCD)
What does it do: The national café chain is a part of Amalgamated Bean Coffee Trading Co. Ltd and competes with the likes of Barista Coffee Co.
Investors: Sequoia Capital India, JPMorgan, IFC, Deutsche Bank, Templeton Darby Investments
Likely exit: IPO
Why it is hot: With at least 700 cafes, the firm is the largest café chain in the country. “CCD has changed the way people take coffee,” says Sumir Chadha, managing director, Sequoia Capital India.
Attero Recycling Pvt Ltd
What does it do: Electronic waste recycling.
Investors: NEA-IndoUS Ventures, Draper Fisher Jurvetson (DFJ)
Likely exit: IPO or merger and acquisition (M&A)
Why it is hot: Electronic waste recycling market is estimated to be 150,000 tonnes in India, with an annual growth rate of at least 35%. Also, there is always a possibility for India to process imported waste. Attero has established a facility for what is called end-to-end recycling. Besides the Indian market, the unit, which is capable of recycling close to 98% of incoming electronic waste, is creating an international ecosystem of suppliers, partners, and customers. “Although competition will come, the company can establish a leadership position in longer term with a combination of innovation (both technology and process), as well as scaling a well oiled supply chain operation,” says Mohanjit Jolly, executive director, DFJ India.
SKS Microfinance
What does it do: SKS is a microfinance lender lending to poor women. Since its launch in 1998, it has provided at least $1.6 billion (Rs7,744 crore) and has maintained loans outstanding of $528 million in loans to some 4.22 million women members.
Investors: Sequoia Capital India, Dominion Ventures, Sandstone Capital, Kismet Capital
Likely exit: IPO
Why it is hot: It is a very profitable business even as its serves the social purpose of financial inclusion of the poor. “SKS dominates the microfinance industry in India and has the potential to be a very large public company with India and global operations,” says Chadha of Sequoia Capital.
TELiBrahma Convergent Communications Pvt Ltd
What does it do: TELiBrahma is a mobile solutions provider which offers Bluetooth-enabled advertising solutions for cellphones (Bluetooth, a short-distance wireless technology, allows data connectivity between devices).
Investors: Inventus Capital, Ojas Venture Partners
Likely exit: M&A or IPO
Why it is hot: Advertisers need or prefer ad mediums/networks that enable or provide qualified reach, accountability of the spending in terms of measurability, rich media applications, cost-effective advertising and promotion at the point of sale or location. While existing mobile-based ad solutions aim to address the above needs of advertisers, they are dependent on service providers, and require either phones with GPS (global positioning system) or triangulation-based cellular techniques to reach customers thereby limiting scope. TELiBrahma with its nationwide network of Bluetooth enabled zones is positioned to take advantage of the emerging digital advertising landscape. “As ad spends increasingly move towards digital media/BTL with clear emphasis on measurability and relevance, we expect that TELiBrahma’s offering will do exceedingly well,” says Rajesh Srivathsa, managing partner, Ojas Venture Partners. BTL is short for below the line advertising that does not rely on traditional channels such as television, print or radio.
Strong businesses: (left) Kotak Private Equity head Nitin Deshmukh (Ashesh Shah / Mint) and Ojas Venture’s Rajesh Srivathsa (Hemant Mishra / Mint)
Metahelix Life Sciences Pvt Ltd
What does it do: It is a bio-technology company focusing on developing traits and technologies for crop protection and improved productivity.
Investors: Kotak Private Equity Group, Nadathur Holdings and Investments
Likely exit: IPO or M&A
Why it is hot: It is India’s strongest indigenous technology-led agri sciences and seeds company, says Nitin Deshmukh, chief executive officer, Kotak Private Equity Group. Also, the firm has a strong pipeline of genetically modified, or GM, seeds. Metahelix’s Bt-cotton has completed large-scale trials and will be in the market in second half of 2009 making for the first indigenous GM seed. The company has also completed the development of Bt-rice. Okra, brinjal, chilli and tomato are under development.
Insta Health Solutions Pvt Ltd
What does it do: Insta Health helps automate hospitals—largely, medium and small ones— in the country.
Investors: Inventus Capital Partners
Likely exit: IPO or M&A
Why it is hot: Although it is a start-up and has not delivered any returns to the investors so far, Samir Kumar, managing director, Inventus Capital, says the opportunity Insta Health is tapping into is huge. As the healthcare industry expands and customers demand better services, small and medium hospitals will have to automate or face extinction. “We feel that the team coupled with the domain knowledge that some of the founders bring, will help it to succeed,” Kumar says.
IYogi Inc
What does it do: IYogi provides next-generation, personalized remote computer support services for consumers.
Investors: SAP Ventures, Canaan Partners, SVB India Capital Partners
Likely exit: IPO or M&A
Why it is hot: The firm is growing strongly and offers direct-to-consumer model around labour arbitrage. “In the current market, when most companies are looking at saving costs, we feel it’s much more strongly positioned to do well,” says Alok Mittal, general partner at Canaan Partners.
BVG India Ltd
What does it do: It offers facilities management services.
Investors: Kotak Private Equity Group
Likely exit: IPO or M&A
Why it is hot: Facilities management is one of the fastest growing service business growing on the back of record infrastructure and real estate investments. “Over the next two-three years it will probably be the largest pure-play facilities management services company in India, offering services for mechanized cleaning, housekeeping and janitorial services, landscaping services, plant relocation and waste processing services,” says Kotak’s Deshmukh. BVG’s key clients include the Parliament House, Rashtrapati Bhavan, the prime minister’s residence and office, and Tata Motors Ltd’s factories in Pune, Jamshedpur and Rudrapur.
Cellcast Interactive India Pvt Ltd
What does it do: It develops integrated participation content for the mobile and interactive television market. Its services enable broadcasters, content developers and media ventures, besides telecom firms, to respond to demand for services around the convergence of television, information technology and telecom.
Investors: Canaan Partners
Likely exit: IPO or M&A
Why it is hot: With mobile phones fast becoming an all purpose, interaction device for consumers across the globe, demand for and use of interactive digital entertainment is on the rise. Cellcast “is one of the very few direct-to-consumer VAS (value-added service) models. We have a feeling that this model will scale up very well in future,” says Mittal of Canaan Partners.
SIRO Clinpharm Pvt Ltd
What does it do: It’s a full service contract clinical research organization, or CRO, that provides clinical development solutions to support clinical trials.
Investors: Kotak Private Equity Group, 3i Capital
Likely exit: IPO or M&A
Why it is hot: SIRO Clinpharm has emerged as the country’s largest,  local full-service contract CRO providing clinical development solutions to support first to fourth phase clinical trials in India and in Europe. It has facilities in Germany and Estonia. “It has successfully completed over 250 clinical studies across 15 therapeutic segments and over 40 cities in India and in Europe for several big pharma and biotech companies,” according to Deshmukh of Kotak.
Miles Software Solutions Pvt Ltd
What does it do: It provides software solutions to financial services customers. Miles’ flagship product, MoneyWare Integra, is used by wealth management companies for end-to-end operations management, including portfolio monitoring, trade order management, accounting, reconciliation and client regulatory reporting.
Investors: Zephyr Peacock, Lighthouse Funds
Likely exit: IPO or M&A
Why it is hot: Miles’ institutional customers are becoming more sophisticated and increasingly dependant on technology to manage and streamline operations. “It has a strong market leadership position supported by a comprehensive suite of products. These products allow asset managers to support the growing complexity of financial products and increasing regulatory compliance requirements,” says Mukul Gulati, managing director, Zephyr Peacock India.
Tejas Networks Ltd
What does it do: Tejas develops communications gear to support high-performance telecom infrastructure.
Investors: Cascade Capital Management, Battery Ventures, Mayfield Fund, Sandstone Pvt. Investments, Intel Capital, Sycamore Networks, Jade Dragon (Mauritius)
Likely exit: IPO
Why it is hot: India is the world’s second largest market by consumers making for a strong market for Tejas. Besides, with telecom companies in South-East Asia and Africa on a growth path, Tejas is positioned well to cater to the demand from these regions, says Sudheer Kuppam, managing director for India, Japan, Australasia and South-East Asia, Intel Capital.
This list was compiled based on inputs from Nitin Deshmukh, CEO, Kotak Private Equity Group; Kanwaljit Singh, managing director, Helion Venture Partners; Promod Haque, managing partner, Norwest Venture Partners; Mohanjit Jolly, executive director, Draper Fisher Jurvetson India; Rajesh Srivathsa, managing partner, Ojas Venture Partners; and Alok Mittal, general partner, Canaan Partners.
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First Published: Tue, Jun 23 2009. 12 25 AM IST