On a quiet Sunday morning in the green campus of the Indian Institute of Technology, Madras, 23 lucky start-ups got their six minutes of fame each.
That was the amount of time assigned to the companies to pitch ideas to venture capitalists (VCs) at the third edition of Proto.in, a biennial networking event for VCs and entrepreneurs that was held over the weekend here.
“That (six minutes) is how much time it takes for an elevator to ride from the ground floor to the 20th floor and start-ups must learn to make a crisp and direct elevator pitch to an investor,” said Atul Chitnis, an open source software activist who was at Proto.in to scout for technology ideas.
There was a distinct pan Asian flavour to the networking event for entrepreneurs and venture capitalists. Three startups from Malaysia were among the 23 technology companies which demonstrated their product ideas to investors, industry executives and entrepreneurs at the two-day event on the campus of IIT-Madras. Others included Multimedia Display Technologies, a supply-chain software specialist, Britesoft, a software tools firm, and TISS MSC, a software securities firm.
The Indian companies included a mix of software firms and pure consumer plays including Cricko, a platform for cricket gaming, video uploads and mobile alerts that has been developed by Silkworth Technologies. “By 2009, we expect to have a revenue base of $ 135 million with gaming, Internet and FM radio products on offer,” said Pavan Kachibhatla, chief executive, Skilworth Technologies that owns Cricko. There was also Lucid Software Technologies with a software-testing product, called NDT Muulam, built by a team of IIT Madras alumni.
“India is really the next big market for us, so apart from raising capital, closing deals with local partners is the opportunity we are tracking at Proto”, said Liew Choon-Lian, Chairman and chief executive of Multimedia Display Technologies, a Malaysian start-up that builds low-cost solutions to track supply chain in retail, logistics, healthcare and education. Britesoft, that develops tools for computer programming and TISS MSC, a software security solution provider, were the other two start-ups on display at the event.
The venture capitalists at the event were very clear on what they were looking for.
“Enterprise software that addresses niche markets and consumer plays with a clear business model are both high-growth areas in India that we track,” said Sateesh Andra, venture partner, Draper Fisher Jurvetson, a Silicon Valley venture capital firm.
“We have shortlisted four companies that will receive between Rs 50 lakh and Rs 2 crore of funding from the Chennai Fund”, said Raghu Rajagoplan, programme director, Chennai Fund, who runs Energeate, a business consultancy firm. To be able to pick four start-ups out of a pool of 23 is a hit rate that investors perceive as above average with most networking events throwing up just ten promising leads from a group of 150 said Mahesh Murthy, a partner at Seed Fund, a Rs 65-crore fund launched in December 2006.
The 23 firms that pitched to VCs at the event were selected from 120 start-ups that applied for the privilege of being heard. In all, 15 high net worth individuals and 22 venture capitalists and angel investor groups attended Proto.in.
In the second quarter of 2007 (April-June), venture capitalists have invested around $112 million (Rs451.3 crore) in 19 deals in India, up from $40 million invested in the corresponding period in 2006, according to venture capital tracking firm Venture Intelligence.
“An event like Proto is a big draw for investors such as myself because at one shot we get to meet 23 companies that have been through a first level of screening”, said Sasha Mirchandani, partner Blue Run Ventures who is part of the angel investment group Mumbai Angels. Start-ups that presented at the January 2007 edition of Proto.in are now beginning to close deals that were initiated at the event. ”
“Proto has just introduced Smart Pundits to the corporate acquisitions team at the automobile company Mahindra” , said Vijay Anand, co-organiser of Proto.in. Smart Pundits builds intelligent control solutions for the automobile industry with customers in Europe and India.
Freshly formed funds such as Ojas Venture, the Rs 600-crore fund, that is a part of Nadathur Holdings, the private equity investment firm launched by N S Raghavan, a member of the founding team at Infosys Technologies and The Chennai Fund, a seed fund launched by the charter members of the Chennai chapter of The Indus Entrepreneurs ( TiE) also debuted at this event.
“Proto.in is emerging as the only networking event in India that offers a structured environment for start-ups and investors to meet and evaluate each other,” said Ganesh Rengaswamy, associate at Greylock Partners, who is a regular visitor to a similar networking event in Silicon Valley, DEMO, which has showcased start-up companies for over 17 years now.