Qualcomm Ventures keeps faith in mobile

At a time when venture capitalists (VCs) are diversifying into sectors other than technology, Qualcomm Ventures – the venture capital arm of telecommunications major Qualcomm – will continue to invest in firms catering to the mobile and semiconductors ecosystem.

Since the beginning of its operations in India in 2007, Qualcomm Ventures (QCV) has invested in three firms. The most recent investment being $9 million in CE Infosystems, or MapmyIndia. It has also invested $3 million in Mumbai-based firm Kirusa, a provider of voice SMS services, and Tessolve Services which specialises in semiconductor testing, packaging and failure analysis.

With a focus on early-stage firms, QCV prefers to invest through syndicated deals rather than going solo. All the three investments that the corporate VC has done so far in India are syndicated.

“We are a corporate VC. We are not going to compete with others. But we want to create an ecosystem and be a partner. And, hence, look at every opportunity that allows us to build this,” Kartheepan Madasamy, Senior Manager India Investments, Qualcomm Ventures, says. He feels that their entry into the Indian market towards late 2007 was at just the right time and not too late.

“I think we entered at the right time. The quality of business is improving and we have seen that entrepreneurs are also improving,” he points out.

Despite a slowdown, Madasamy believes that India still offers an opportunity. The confidence comes from the fact that entrepreneurs are now focusing on the domestic market as well.

“Increasingly, we have seen entrepreneurs focusing on the Indian market. Along with this, they are also understanding the need to have a business plan that is sustainable as well as something that can be sold here. Moreover, the Indian consumer has grown and the country has become a large enough market to be addressed,” he observes.

Qualcomm Ventures invests in the range of $1-10 million. The VC has been investing from its global fund of $500 million raised at its inception in 2000, and remains invested for a period of four years.

In the current market scenario, Madasamy says that they will continue looking at newer opportunities even as supporting firms in existing portfolio will be a clear priority. QVC’s investment is ruled by the philosophy to accelerate and influence the growth of the wireless market. This would mean creating new technology businesses. It also looks for firms that fits with Qualcomm’s products and initiatives.

“We invest in firms that have an IP (Intellectual Property) as we can add value to the firm by providing access to our partners as well as access to OEM handset makers,” adds Madasamy. Sometimes, the parent firm also helps in spotting a good investment deal. Madasamy reveals that they even allow access to markets for the invested firms.

Another important aspect when it comes to investment is that QCV mostly invests in one company per niche market. Madasamy explains that the identified technology or firm should be able to address markets across the segment. Kirusa, is one such instance.

“Kirusa is into providing voice-based SMSes. India is a huge market and a large percentage of users in this segment do not know how to type in English. Kirusa’s technology and services addresses a mixed tier of consumers,” Madasamy points out.

Qualcomm Ventures was formed in 2000. Since then, the company has invested in a total of 44 firms globally. Of these, the venture has already exited out of 15 firms and has 29 active portfolio firms.