Bangalore/New Delhi: Cisco Investments, the venture capital arm of Cisco Systems Inc., will invest $40 million in early-stage firms under its India Innovation investment programme.

The company made its first investment under this theme in a Mumbai-based real-time analytics firm, Covacsis, along with GenNext Ventures and Blume Ventures. The value of the transaction was not disclosed.

“Our objective is to help catalyze and accelerate that potential into action that will have a positive impact in India and globally," said Dinesh Malkani, president, sales, Cisco India and Saarc.

The $40 million that Cisco has earmarked for early-stage companies is part of the $250 million that the company said earlier this year it would invest in India in next-generation technologies, including big data and analytics, Internet of things, connected mobility, storage and content technology ecosystem.

Over the last two years, several other companies have been helping start-ups in their growth journeys, by either incubating them, or helping them with partnerships with large corporations.

“It is a global phenomenon driven by technology and the innovation. It is a win-win situation for both parties. In the start-ups’ cases, they get the much-needed money, brand association and, in some cases, the clients of the big corporations. The big firms are not venture capitalists, so when they invest, they invest from a long-term business benefit perspective," said Vishal Tripathi, principal research analyst at market researcher Gartner.

Currently, the main focus area of Indian product companies are on technology—which includes mobile, enterprise software, social networking, cloud computing and education—and banking, financial services and insurance, which comprise 42% of the total products.

Cisco has already invested in MobStac, a Bangalore-based start-up, as part of its global connected mobility theme, growth-stage companies including Netmagic and Apalya, and social innovation funds like Aavishkaar, the company said in a statement.

The Indian product landscape comprises more than 3,400 companies, with around 500 firms being created every year, for over a decade now, according to a report by the industry lobby group Nasscom published in November. The total revenue of the sector is close to $2.2 billion, and is predicted to grow to $10 billion by 2020.

This investment will help the fledging product ecosystem in India, which has seen as many as 145 venture capitalist deals in the software, Internet and mobile industries, worth around $711 million, in the last six years.

This accounts for 65% of the total venture capital investments in the country, according to the Nasscom report.

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