Murthy, 72 and Premji, 73, find themselves in another duel, as the two billionaire septuagenarians’ financial and strategy skills are put to the test while they oversee their family offices, Catamaran Ventures Llp and PremjiInvest, respectively.
A decade after Murthy set up Catamaran in 2009, the venture capital fund continues to wrestle with how to find the best playbook.
Catamaran is now mulling whether it should continue to back startups and make any new investments in the sector, said two executives familiar with the matter. Instead, the company plans to focus on investing in listed companies, the executives said, requesting anonymity.
The potential revamp of investment strategy by Catamaran tracks the appointment last month of Abishek Laxminarayan as chief executive. His appointment follows the exit of Arjun Narayanswamy who took over as CEO of Soroco, a Boston-based artificial intelligence-focused firm.
Incidentally, Soroco was founded by Rohan Murty, son of Narayana Murthy, in 2014.
“In December, a review of the portfolio was undertaken by NRN and it was decided that Catamaran will not make any fresh investments in startups," said an executive familiar with the discussions. The executive did not want to be named as the discussions are private.
“The (Catamaran) fund will wait to get an exit from its current investments. The focus will now be to look at investing more in listed firms," the executive said.
Murthy and Narayanswamy did not respond to emails seeking comment.
PremjiInvest declined to comment.
Mint could not independently ascertain the total investments made by Catamaran since it was founded in 2009. However, Catamaran’s performance pales in comparison to PremjiInvest, the family office of Azim Premji.
Since it was set up in 2006, PremjiInvest has become India’s largest family office, managing about $5 billion of assets, said a third executive familiar with the matter. PremjiInvest backs about two-dozen startups and also owns equity stakes in about 40 listed companies.
One of the executives attributed the performance of the two funds to the varied approaches adopted by Murthy and Premji.
Murthy started Catamaran with an initial corpus of $120 million as against Premji who wrote a $1 billion cheque.
Secondly, PremjiInvest did not limit its investments to only India and backs both startups and listed companies in the US.
Finally, PremjiInvest is bigger in terms of manpower, employing about 40, as against Catamaran, which has half-a-dozen people.
“Premji got a professional in Prakash (Parthasarathy) to set up and run the fund, and Prakash managed to build it to this size where because of the size, most private deals come to PremjiInvest. This is something which Murthy could not do because he relied on a team of youngsters who had recently graduated from college to run the firm," said the first executive cited above.
Catamaran currently has investments in seven startups, including education-technology focused startup Ace Creative Learning Pvt. Ltd, ad-tech firm Vyoma Media, Acko General Insurance, medical diagnosis firm Achira Labs, Healthspring Community Medical Centres, Innoviti Payment Solutions and Threadsol, a startup that offers enterprise material management technology to garment manufacturers. Catamaran exited from Hector Beverages Pvt. Ltd, which makes traditional drinks under the Paper Boat brand, and sold its stake in Manipal Global Education Services in 2013.
Catamaran has investments in seven listed firms, including a 3.83% stake in Vesuvius India Ltd, 2.46% in Garware Technical Fibres Ltd, 2.65% in Ambika Cotton Mills Ltd and 1.07% in Nesco Ltd. Catamaran also has less than 1% in Wabco India Ltd, S.H. Kelkar and Co. Ltd and SKF India Ltd.
In addition, Catamaran has a joint venture with Amazon.com Inc.—Cloudtail India Pvt. Ltd, the largest seller on Amazon India’s platform.
The joint venture partnership changed with Murthy’s firm now owning 76% in the JV as against 51% earlier after India changed the rules in December last year, limiting foreign e-commerce firms from owning a controlling stake in an entity which also sells on the market place.