Sistema to speed up investments in start-ups, ramp up fund

Russian conglomerate Sistema plans to expedite its pace of investment in India start-ups and expects to exhaust its USD 50-million Asia fund by first half of 2017, of which about one-third has been used till date.
"Sistema Asia Fund (SAF) has been operational for last 9 months now and we have already identified the key areas to focus on. We have made two investments so far. The aim is to close one deal per quarter and look at closing anywhere between 4-6 deals in a year," Vsevolod Rozanov, Senior Vice-President and Group CFO, Sistema JSFC, told PTI in an interview.

Sistema JSFC started investment in India in 2008 and is the first private conglomerate from Russia to invest in the Indian telecom sector by acquiring 73.7 percent stake in Shyam Telelink, a fixed-line and CDMA mobile service provider operating in Rajasthan.
Subsequently, Sistema joined hands with the Russian Federation and the Shyam Group of India to set up Sistema Shyam TeleServices Ltd (SSTL) in which it invested over USD 4 billion.
The company is now in the process of merging its mobile services business with Reliance Communications, but plans to step up investment in growing Indian start-up eco-system.
"The focus of Asia fund is only India. There is a lot of opportunity that we are seeing here. We expect the first tranche of USD 50 million (Rs 340 crore) to be fully utilised by the first half of next year, post which we will evaluate the situation and allocate more funds for SAF," Rozanov said.

He visited Bengaluru last week to meet and identify potential start-ups where the company could invest.

"The Sistema group is in good financial shape at the moment and hence, there is no financial restriction for funding. The group has significantly reduced its debt and significantly increased the dividend flow from its daughter companies. At this stage, we are focusing on technology and consumer Internet segment," Rozanov said.
Sistema is looking to invest in technology and niche consumer-centric segments.
"We will not restrict ourselves from taking a different approach. It will depend on case to case. We have reviewed 45-50 cases so far," Rozanov said.

The Russian conglomerate did not have a pleasant regulatory experience in its Indian telecom business, but it has not faced any issue in working with start-ups in the country, he clarified.
On its telecom business merger with RCom, Rozanov said the decision has been taken to benefit both the companies and the process has been smooth.
"The merger is alignment of interest of both the parties. We don't see any issue in the merger. We definitely will stay invested in telecom business. The whole focus is to close the deal," Rozanov said.