India’s second-largest software services exporter Infosys will do 8-10 deals every year from its $500 million corpus earmarked for venture capital investments in startups across the globe. “We have done nine deals in the first year. We think it is pretty good,†Ritika Suri, senior vice president, corporate development and ventures, Infosys, told VCCircle. Suri is the global head of mergers and acquisitions and startup investments at Infosys.
As a corporate venture investment arm, Infosys Innovation Fund has adopted a cautious approach to picking stake in startups. While financial return is the key priority, Infosys looks at the prospects of taking the services and product offerings from these startups to its own clients. “Our priority will be mostly enterprise IT startups. We look at startups in cyber security, digital technology and data,†Suri said.
She declined to disclose the company’s total investment in startups so far. It is, however, estimated to be in the range of $40-50 million. Infosys started off with $15 million investment in Nova, a spin-off from Dreamworks Animations, an animation technology firm which also produces animation films, in early 2015. It then picked up 5% stake for $1.4 million in Bangalore-based ANSR Consulting Pvt. Ltd that helps MNCs launch their IT back offices in India.
Infosys had picked up a minority stake in CloudEndure, an Israeli startup that provides cloud migration and cloud-based disaster recovery software, for $4 million. In December, it invested $3 million (around Rs 20 crore) in WHOOP Inc, a US-based startup that offers performance optimisation solutions for professional athletes and sports teams. It has also backed Valley-based early stage venture capital firm Vertex.
In 2016 so far, Infosys has announced only two deals. “We are finding no dearth of deals. In some cases the due diligence takes a lot of time,†Suri said. About the likely number of startups it is going to invest in the current year, she said, “I cannot predict those numbers. Any good VC will do 8-10 deals and that is the number we are looking at.â€
Earlier this year, the company invested $4 million in Waterline Data Science. In April it invested an undisclosed amount in Silicon Valley-based data analytics company Trifacta.
Infosys initially had plans to invest in a substantial number of Indian startups. However, it has so far made only one investment and most of its investments are in the US and Israel. “In India, 85% of startups are in consumer internet. We still see the remaining 15% as a big opportunity,†she said.
Infosys Innovation Fund has a relatively longer exit horizon when compared to standalone VC firms. It looks at 10-12 years to exit from its investments. Some of its investee companies are potential acquisition targets as well.
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