Intel Capital, the strategic arm of Intel Corporation, which has invested $300 million in 80 Indian start-ups, is not perturbed by poor investment sentiment or the slowdown in the IT space. In an interview with Ranju Sarkar, Intel Capital President Arvind Sodhani explains why the firm continues to be bullish on India. Edited excerpts:
What’s the outlook for investments, globally?
I have not seen any slowdown. We are moving forward. We are investing aggressively all over the world. We have invested about $200 million. Our pace has not changed. We are on track to invest somewhere between $300 million and $500 million this year.
What’s your outlook for India?
We are excited about India. We were among the earliest investors in this country (started in 1988), and have invested over $300 million so far in over 80 companies. We have a very large team based in Mumbai, Bangalore and Delhi.
As the IT sector faces downturn, will you be shifting focus?
There is enough headroom for the Indian technology sector to grow. Adoption of technologies will keep increasing and most of this growth would come from the rapidly growing start-up segment. We will keep investing in firms that create an ecosystem to accelerate adoption and usage of personal computing devices (PC, ultrabook, tablet or smartphone). Sector-wise, we are focused on e-commerce, data centres, consumer internet, education, software and cloud services.
How do you strengthen IT portfolio companies to overcome the slowdown?
We have a team of investment directors who are actively participating on the boards of various portfolio companies. For us, mentoring and investing go hand in hand. We take an active role in helping our portfolio companies grow by organising Intel Capital Technology Days, the Intel Capital Global Summit, and other events.
How have India and China fared for you in terms of returns/exits?
India is unique, in the sense that there’s a highly developed local equities market, which does not exist in the same way in China. There’s a domestic equity market being developed in China, but those markets are in their infancy. The equity market in India is very developed, and the process of doing an IPO here is very smooth.
E-commerce valuations in India are ruling high. Will you invest?
Valuations in the e-commerce space in India are not dissimilar to those in other parts of the world. But infrastructure is not the same.
The delivery, collection and payment mechanisms — and all the other elements required to make e-commerce successful — are not comparable, and have not developed to the same extent.
On the other hand, opportunities are fantastic. E-commerce has barely scratched the surface here.