Indian software product think-tank iSpirt, which has been working to facilitate merger and acquisition activity for Indian product companies under its M&A Connect programme, held a second roundtable at Palo Alto in California last week where it showcased some Indian startups to top acquirers in the Silicon Valley.
The roundtable, which was also aimed at understanding the requirements of key companies when they look at M&A, was attended by corporate development and other senior officials from Google, Microsoft, Intel, Qualcomm, Groupon, VMWare, Intuit, Box, Cadence, Docomo and LG.
“The roundtable last year was really a 'learning' session where we heard from some of the acquirers on their general M&A process, ecosystem they work with (investment banks etc). This was invaluable since it has helped structure some of our internal iSpirt
programmes and create an action plan,” Sanat Rao, partner, M&A iSpirt
told Business Standard. “The current roundtable was focused on the next level -- identifying specific gaps the companies have, and obtaining a 'virtual mandate' where iSpirt
will connect them with interesting Indian start-ups in these areas.”
Rao hosted the event on behalf of iSpirt, along with iSpirt
Founder-Member Jay Pullur.
In May last year, iSpirt, which was founded on 4 February 2013, had conducted a closed-door meeting with technology majors at Palo Alto in the US. The meeting had seen participation of firms like Facebook, IBM, Cisco and VMware, among others. According to some sources, officials of the Bangalore-based startup Little Eye Labs, which was acquired by Facebook in January, had first met the social media giant’s officials at this meeting.
These roundtables are part of iSpirt’s M&A Connect Programme, wherein the think-tank has launched a hotline that can be used by product start-ups if they want to be acquired, or need to raise funds.
Even as Rao refused to share details of which Indian startups were showcased to the US biggies at the recent roundtable, he said, “most Indian start-ups are just not on the radar of the acquirers there. Israeli start-ups have solved this problem over the years by ensuring that a key member of their management team moves to the Silicon Valley. 'Discovery' is a big challenge and one that we need to address first.”
He added, that most large companies, have in the past acquired firms that they had business engagements with and so ‘it is essential for Indian companies to have business engagements with the big acquirers as a stepping stone to future M&As’.
Rao also said that ‘acqui-hires’, where a large company acquire smaller ones for their engineering talent rather than their product, are ‘extremely hot’ right now due to shortage of engineers at large global corporations.
Separately, deriving confidence from the recent uptick in M&A activity as well as with the efforts being put in by iSpirt
in the last one year, Sharad Sharma, founder-member of iSpirt
said, the think-tank hopes to conclude at least ten acquisitions in the software product space in India in 2014.
Several industry sources have said that the think-tank is in the process of facilitating an acquisition, which may be announced in the near-future. Even as Sharma said that 'some work was underway', he refused to share any further details on the same.