Tuesday, August 23, 2005

VC -->Mayfield on India

I spoke with Yogen Dalal at Mayfield this afternoon. We had an interesting discussion around a recent article by Private Equity Week's Daniel Primack. More on that tomorrow.

I asked him why we weren't seeing too many early-stage investments going into India and what if any plans Mayfield had for capitalizing in the country.

His reply, verbaitim:

We expect India to create early stage companies much in the way Israel has. We haven’t seen too many of those kinds, that satisfy worldwide market needs, as the Indian technical and entrepreneurial community is just getting started. The talent has for the most part been involved in “outsourcing” to IT departments in corporate America and Europe or working in R&D labs for US companies like Intel, Oracle etc. These entrepreneurs will discover problems that need solving and will start their own enterprises to do so. The same thing happened in Silicon Valley 30 years ago with Fairchild and HP…

But there have been a few – Tejas, Ashok Narasimha’s company, etc. We expect to see more over the next few years. Raj Kapoor, Robin Vasan and I are looking at this space and working with cross border VC funds and other Indian VCs in Silicon Valley to explore these kinds of investments and I am sure we will do one soon.

The difference with China is that the Chinese internet infrastructure is more advanced and therefore there is the need for Chinese startups that satisfy the China market. India is a ways off and the kinds of things that have been successful have been BPO and low tech infrastructure deals which haven’t been part of our strategy.

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