Infosys CEO Vishal Sikka meets PM Modi; dedicates $250 million to innovate in India

BENGALURU: Infosys has pledged to invest $250 million (Rs 1,500 crore) in Indian startups in the first such commitment by a cash-rich software services company. Chief Executive Vishal Sikka, a founder of two startups himself, made the promise on Wednesday to Narendra Modi, thereby burnishing his company’s patriotic credentials when the ‘Make in India’ theme dear to the prime minister is all the rage.

“Startups represent the vision, the hope and the persevering entrepreneurial spirit taking root in India,” Sikka was quoted as saying in a statement. “With the ‘Innovate in India’ fund, Infosys will invest in great Indian startups, help amplify their engineering and operations, as well as help bring their innovations to market at scale.”
Infosys CEO Vishal Sikka meets PM Modi; dedicates $250 million to innovate in India

Infosys’ announcement was greeted in the startup community with a mixture of excitement and scepticism — the former because such a pledge to acquire startups is unprecedented and the latter because India’s second-largest software company has done little with a $100-million ‘innovation fund’ announced by SD Shibulal in April 2013 when he was CEO.

Many former bosses of Infosys backing startups

Under Sikka, the big development so far has been a five-fold increase in the size of the fund. Half of this is now being set aside for investment in Indian startups.

Over the last few years, the vibrant startup sector in the country has seen a flood of money from investors across the globe. Last year alone, over $2 billion was invested in startups and companies such as Flipkart, Snapdeal and Olacabs have become posterboys of Indian entrepreneurship. About 800 new ventures are set up every year, estimates trade body Nasscom, which projects that by the year 2020 the country will be home to 11,500 startups, employing over 2.5 lakh people. “Let the party begin,” said Infosys former finance head V Balakrishnan, who along with another company veteran, Mohandas Pai, runs a technology investment fund Exfinity that backs startups and raised Rs 125 crore in August.

“I believe the cake is large enough for everyone to have a piece of it.” Many former Infosys bosses are currently backing startups. Cofounders SD Shibulal and Kris Gopalakrishnan have a venture fund, Axilor Ventures, which aims to invest up to $1 million in early-stage funding. Founder and former chairman NR Narayana Murthy’s family office runs Catamaran Ventures which has backed companies such as Hector Beverages and Wellspring Healthcare.

Another company cofounder NS Raghavan has a technology investment firm Ojas Ventures which has backed startups like internet marketing company Vizury and interactive technology developer TELiBrahma. Infosys, set up by NR Narayana Murthy along with six friends in 1981, is considered by many as the country’s true entrepreneurial software company, and for this reason some believe Sikka’s desire to back technology-focused startups is a good move.

“I do believe this is a catalytic move for the industry and worth emulating by others,” said Sudhir Sethi, founder-chairman and managing director IDG Ventures India. Nonetheless, Sethi said that key to the success will be how Infosys executes this plan. “This is the second such attempt (by Infosys),” said Jens Butler of London-based IT research firm Ovum, referring to Infosys first setting up an innovation fund in 2013.

Since the company has not given any details, including a timeline by when it plans to make investments, Butler is unsure about how Infosys will walk the talk. Sikka too conceded that the company is still working out the details of the plan as it does not have a team to oversee the fund. “Over the next few weeks, we will establish how we will operate this,” Sikka told reporters last week.

Source : ET

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Author:

Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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