India has potential to spawn innovative product start-ups: Alok Bardiya

Interview with Country director-corporate development (India and ANZ), Cisco

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Cisco Investments, the venture capital arm of Cisco, has set aside $40 million for India under a fund called 'India Innovation'. This fund, carved out of Cisco Investments' global pool of $250 million, will invest in early-stage Indian start-ups focused on connected mobility, big data and Internet of things. Alok Bardiya, country director -corporate development (India and ANZ) at Cisco, speaks to Itika Sharma Punit about the India-focused fund. Edited excerpts:

What is the rationale behind making a specific fund allocation for India?

Traditionally, only services companies used to come out of India, but product activity in the Indian market in the past two years is quite interesting. The information technology services sector, which gained traction in India in the 1990s, created a strong engineering talent in the country, and that workforce is now looking to branch out. India has the potential for innovative product start-ups coming out of here.

Why focus on early-stage start-ups?

Cisco has traditionally invested in growth-based start-ups across the world, including India. Early-stage start-ups are of interest to us because disruption and innovation happen more at that level. The decision to invest in early-stage companies is part of our strategy.

What is the timeline for utilising this find? What will be the ticket size and stake you look to buy?

We are not bound by any timeline to invest or exit but we are looking at 18-24 months for utilising the entire pool. Initially, we'll look to acquire a minority stake. We are very flexible on the ticket size; it could be as low as half-a-million dollars and the upper limit could go up to double-digit million dollars. I would say half-a-million to about $3 million is a sweet-spot for early-stage investment.

Will you partner with other stakeholders in the start-up ecosystem in India?

We'll definitely partner with incubators and accelerators within the ecosystem. We have been in active discussions with several accelerators on areas where we could work together. We may also look at investing in some of them. We will be selective, but we may look at taking the position of an investor in an accelerator going forward.

How will Cisco benefit from the start-ups that the venture capital arm will fund?

This is one of the biggest drivers to invest in start-ups and to invest in early-stage companies. Globally, we make investments in technologies or solutions that can have a go-to-market kind of partnership with Cisco. There are times when the technology of the investee company would add up to what Cisco has, so there would be integration for taking the product to the customer.