Tech Mahindra joins larger peers to make a foray into start-up space

Sets aside $100 mn to invest in innovative start-ups, incubate internal ideas

In line with the larger trend across the information technology  services industry, Tech Mahindra, the country’s fifth largest IT services company, is gearing up to reap the benefits by not only investing in innovative start-up companies but also internal ideas through an incubation programme.

The Mahindra Group company has set aside around $100 million for incubating in-house startups, as well as funding technology start-ups, primarily based out of the Silicon Valley, a senior official of the Mumbai-based company said.

“We are looking at the new bunch of start-up companies in the Silicon Valley. We have a focused programme around working with new age companies,” Jagdish Mitra, chief strategy and marketing officer,  told Business Standard. “Also there are a few start-ups including those in the telecom space in the Valley which Tech Mahindra is funding.”

Its larger peers like Infosys and Wipro have already announced dedicated funds to invests in new-age technology start-ups, in India, as well as globally. Infosys, which has announced a $500-million Innovation Fund, has already announced couple of investments in the US. Similarly, Wipro has  launched a $100-mn fund for investing in start-ups. Mitra said Tech Mahindra is incubating few start-ups within the company which would be unveiled within the next quarter.

“As far as funding is concerned, our focus is on B2B (business to business) companies. We are concentrating on (investing in) firms that offer solutions which will help us deliver better service. Currently, we are not very actively looking at companies that offer B2C solutions. We are however working on a few B2C startups within Tech Mahindra,” Mitra added.

Besides, Mitra said Tech Mahindra is incubating few start-ups within the company which would be unveiled within the next quarter. “We are also incubating a few startups inside the company which will spin-out within the next quarter or so.”

Talking about tie-ups of Indian IT companies with the ones in the Silicon Valley, which also was the main focus of Prime Minister’s Narendra Modi’s visit to the Bay area, Mitra said that the company has significant ties in the Valley.

“Our strategy is based around significant amount of tie-ups with new technology companies in the Valley,” he said. Other than Silicon Valley, Tech Mahindra is also watching out for tech companies in countries such as Israel.

The company is also working on a host of software and hardware solutions for different sectors including healthcare, agriculture and education. One such initiative is ‘Farm to Fork’ which is aimed at reducing food grain wastage. The company has set aside upwards of $20 million for such projects.

“Our solutions surround around solving the food grain problems. A system which lets one know that which grains are currently being leveraged and what temperature they are at, so that the grains can be transported before they rot. We are trying to enable farmers to understand at which point the irrigation needs to start or stop, how much pesticide should be used,” said Mitra.