Trends in Investments in Indian Lifesciences & Healthcare Feb 23, 2015

"It is true that companies in the lifesciences space typically have longer gestation periods in providing The approach of funds to lifesciences firms therefore needs to be different. As a result, globally, funds invested in lifesciences are typically specialized or sector focused. Start-ups need to understand that VC funds have its own investors, promising returns on certain timeframe." Ashwin Raghuraman (COO, India Innovation Fund)

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Mitra Biotech, Harvard unravels how to kill cancer cells that avoid chemotherapy Feb 13, 2015

In a rare event for Indian companies, Bangalore-based Mitra Biotech has been part of a potential advance in cancer treatment, by figuring out a new mechanism of resistance to chemotherapy and possible ways out of the problem. The study was a collaborative effort between Mitra Biotech, Harvard Medical School and University of Waterloo in Canada.

Their research, published yesterday in the top-ranked journal Nature Communications, showed a new way in which cancer cells avoid the onslaught of drugs and bounce back after chemotherapy is stopped. They also showed, with help from University of Waterloo mathematicians and scientists in other institutions, on how to eliminate the cells that avoid chemotherapy.

The method was to give another common drug just when the cancer cells begin to morph into a stem-cell like type that can avoid the chemo drugs.

"We found that the right drug at the right sequence at the right time will kill the cells that escape chemodrugs," says Shiladitya Sengupta, co-founder of Mitra Biotech and assistant professor at Harvard Medical School.

Mitra Biotech was set up in 2008 as a Delaware company. It moved offices from Boston to Bangalore in 2009 to work with patients and validate its technology platform. The patented technology platform, called Canscript, has been validated for eight different cancer types on 2000 patients. This was used in the current discovery as well, aided by biologists at Harvard and mathematicians at the University of Waterloo.

Biologists have thought that cancer can relapse through cancer stem cells, which can renew and give rise to new tumours. While this might be true, Harvard-Mitra combine discovered a new way cancer can persist and come back after stopping chemotherapy. In the specific study on breast cancer, it found that a cancer drug taxane induces some cancer cells to develop a protein on their surface that helps them evade cancer drugs. They also found that another drug called dasatinib can kill these evaders when administered at the right time and sequence.

Mitra has investments from Kitven, Accel Partners, India Innovation Fund and Tata Capital. It is developing a business selling the technology platform Canscript to hospitals, doctors and patients to figure out the right combination and sequence of chemo drugs. Mitra opened a lab in Chicago a year and a half ago, and will soon open a lab each in Switzerland and Japan. Patients and hospitals who want to use Canscript have to reach a biopsy sample within 20 hours of surgery to Mitra Biotech lab. It will figure out the combination of drugs for the specific patient within a week.

Combining cancer drugs is beginning to be the new way of treatment, as biologists expect the right combination to block all exit strategies to the tumour. Some biologists say that figuring out the right drug combination is more important than sequencing the genome of a patient, because sequencing information may not lead to a therapy strategy easily. This is because understanding the complex interplay between genes and how they are regulated is a very difficult task.

Mitra claims that its platform technology and further similar advances can change cancer care over the next few years. "There can be a third or fourth line of treatment when doctors have exhausted all possibilities," says Pradip Majumdar, Chief Scientific Officer of Mitra Biotech. Currently oncologists send such patients home for palliative care. They need not do so at least in some cancers where biologists and mathematicians can figure out the right drug combinations.

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With $1.7B fund budget booster, Indian startups on a roll? July 7, 2014

Promises, big investments and setting up of startup initiatives, the Indian Union Budget 2014 has certainly made noise in all the right places. India today needs disruptive ideas and massive fundings and the Budget has been extremely encouraging to the Indian startup community. This is definitely an interesting time to be an entrepreneur in India.

In order to create a conducive ecosystem in the MSME sector, the Finance Minister proposed to establish approximately US$1.7 billion fund to act as a catalyst to attract private capital by way of providing equity, quasi equity, soft loans and other risk capital for startup companies. According to the Minister, the promotion of entrepreneurship and startup companies remains a challenge. While there have been some efforts to encourage, one principal limitation has been availability of capital by way of equity to be brought in by promoters.

To establish technology centre network in order to promote innovation, entrepreneurship and agro-industry, the Budget proposed to set up a fund with a corpus of US$33 million (INR 200 crore).

It also announced that the definition of MSME will be reviewed to provide for a higher capital ceiling, and an entrepreneur-friendly legal bankruptcy framework will also be developed for SMEs to enable easy exit. This move signals that the government is serious about issues faced by startups.

A pan-India ‘Digital India’ programme will promote digital inclusion with broadband connectivity up to the village level, thereby enabling improved access to services through IT-enabled platforms.

R Chandrashekhar, President, NASSCOM said, “The announcements on a pan India digital initiative, funding for startups, district level incubator network and leveraging technology for good governance are welcome steps. These measures along with the initiatives on skilling, smart cities and ease of business, reflect the thrust on role of technology in Budget 2014.”

Who will benefit from the US$1.7 billion fund? Will the government turn VC?
“There is some lack of clarity on how exactly this is to be achieved. At one point in the Budget speech, it was mentioned that this would be via a “fund of funds” approach. This means the government would seek out VCs and other players who invest in the space, and become LPs or Limited Partners in such funds, and these funds would do what they do best – identify, mentor and grow startups to exit. This is a very welcome move, given that traditionally, Indian institutions are shy of investing in venture capital funds,” said Mahesh Murthy, Managing Partner at Seedfund.

“However, at a different point in the speech it was mentioned that it would be a “fund of USD 1.6 billion” for startups. This could mean a few things; either that the government would in effect become a VC and have its own processes, people and funding guidelines — something I’m not too enthusiastic about, as I can’t quite imagine ‘babus’ from the Finance Ministry listening to startup pitches. Or it could mean that they are simply continuing a programme put in place by the Congress called CGTSME and administered via SIDBI, which set aside US$0.4 billion (INR 2,500 crore) for putting US$0.1 million (INR 1 crore) into each company. This also, for many reasons, is a sub-optimal approach,” he added.

Experts believe that there has been a more than expected focus on startups. It signals that the government believes that entrepreneurship will be a growth driver in India over the coming years, but the government should have thrown some light on the implementation of these policies.

“The quantum of the allocation suggests that the government is taking this programme seriously. I have always maintained that government capital should only venture where private capital doesn’t. If you read the Budget announcement carefully, what is interesting is that the government views this not as a standalone effort, but as an as effort to stimulate the movement of private capital into startups,” explained Ashwin Raguraman, Chief Operating Officer, India Innovation Fund.

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SureWaves bags Rs 35-crore deal to hire talent, innovate Jan 13, 2014

BANGALORE: Canaan Partners, a multi-billion dollar global venture capital firm, has led a Rs 35-crore investment into Bangalore-based digital media technology company SureWaves MediaTech. Existing investors, India Innovation Fund and Accel Partners, also participated in the round.

SureWaves which provides advertising technology to customers such as food company Nestle, healthcare products maker Johnson & Johnson and consumer goods company Hindustan Unilever will use the funds to hire talent, tap global markets and support innovation.

"We will be targeting several emerging and developed countries," said SureWaves MD Rajendra Khare, who believes their technology is first of its kind, as even in developed markets like United States, an automated centralised solution for insertion and real-time monitoring of ads across multiple television channels is not available.

"First our focus will be to consolidate our position and offering in the India market," said Khare. The firm raised .`10 crore in its first round of funding from India Innovation Fund and Accel in 2011.

Founded in 2006 by former Wipro colleagues Rajendra Khare, Anant Kansal and Tapan Datta, SureWaves has developed a technology that enables large-scale aggregation of audiences across multiple television channels. It then offers a single window interface to large national advertisers to effectively reach out to mass audiences on a market by market basis.

"We call it SureWaves media grid. It is similar to how a power grid works," said Khare, an alumnus of BITS, Pilani, who cofounded semi-conductor start-up Armedia Labs which was acquired by Broadcom Corporation for $67 million. Khare said their "media grid" is one of the largest connected television networks of its kind anywhere in the world which spans across 28 states across the country through partnerships with over 280 cable TV channels. It reaches over 80 million households and 400 million viewers.

The company positions a propriety device which is connected to the grid and the TV channels.

Tata Capital to invest Rs 40 crore in Mitra biotech Oct 24, 2013

Tata Capital Innovations Fund, managed by Tata Capital, along with existing investors India Innovation Fund and Accel Partners, will invest about Rs 40 crore in Bangalore-based cancer care provider Mitra Biotech. The deal values the personalised oncology solution provider at about Rs 200 crore, according to a person with direct knowledge of the transaction who did not want to be identified.

Founded by a team of medical researchers from the Massachusetts Institute of Technology and Harvard Medical School, Mitra Biotech first raised venture funding of Rs 30 crore from Accel, India Innovation Fund and Kitven, a Karnataka-backed fund in 2010.

"This funding is a testimony of the tremendous market opportunity for us," said Mallikarjun Sundaram, chief executive of Mitra Biotech, which now works with some of the country's top oncology institutes to determine the optimal drug or combination of drugs for patients.

This helps reduce the overall treatment cycle and toxicity of conventional cancer medicines. The latest round of funding will be used to scale operations, expand globally and strengthen the business development and research teams, according to Sundaram.

"Cancer is no more a disease of old age," said Mohan Harshey, a partner at Tata Capital who is of the view that the market for affordable and personalised cancer care is growing fast in India.

Indian start-ups sense big opportunity in big data Jul 10, 2013

A new crop of enterprise software start-ups in India is promising to translate mountains of digital data into practical business insights in real time, challenging the dominance of large technology firms, Oracle Corp. and International Business Machines Corp. (IBM), in the big data market.

Backed by some big investors including Blume Ventures, India Innovation Fund and Lightspeed Venture Partners, Indian big data start-ups such as DataWeave, Qubole Inc. and Formcept are helping online retailers price their products competitively, among other things, by allowing them to quickly sift through and analyse massive chunks of data generated by social media.

There's a growing local market for this, and a pool of experienced professionals ready to quit Google Inc., Facebook Inc. and IBM to start big data firms. The market for big data in India is anticipated to grow at nearly 38% a year, from $58.4 million in 2011 to $153.1 million in 2014, according to a study by technology researcher International Data Corp. titled Here comes Big Data: Perspectives from Indian enterprises.


Big data

Big data refers to a collection of data sets or chunks of information too large and complex to be processed using traditional software tools. By applying big data solutions, enterprises are looking to sift through massive amounts of information about users, analyse usage patterns on a real-time basis, and prepare personalized campaigns that can potentially increase revenue per user. Apart from this, firms can make use of big data insights to cut costs and boost profit.

Intel Corp. estimates that the world generates 1 petabyte (1,024 terabytes) of data every 11 seconds, the equivalent of 13 years of high-definition video. IDC estimated that in 2011 all the data created in the world amounted to 1.6 trillion gigabytes (1.56 billion terabytes). By 2020, 50 billion devices will be connected to networks and the Internet.

This explosion of data is also driving entrepreneurs to start businesses focused on different industries, working around challenges specific to them to build big data solutions. Bharti Airtel Ltd, for instance, handles around eight billion calls every day, generating petabytes of data to be analysed for identifying new revenue opportunities. And Royal Dutch Shell Plc., according to a McKinsey report in May, uses advanced seismic monitoring sensors to collect up to a petabyte of geological data per exploration well that need to be analysed; it plans to use the sensors on 10,000 wells.

Last month, when private equity firm TA Associates Inc. invested $25 million (around Rs.150 crore today) in Mumbai-based Fractal Analytics Inc., which provides advanced analytics to Fortune 500 companies, for a minority stake, experts said the deal was an acknowledgment of big data as the next big thing in India’s technology space—a segment, investors, particularly technology-focused ones, are keenly watching.

"The number of companies is small but the quality is good. Unlike in the Internet space where one sees lots of companies but a relatively broad mix of quality,"" said Alok Mittal, managing director of Canaan Partners India, a technology-focused venture capital fund.

Investors such as Lightspeed Venture have taken multiple bets on big data, backing firms such as BloomReach Corp. and Qubole.

"We are seeing a lot of innovation from start-ups that leverage this data to create actionable insights for enterprises or use this data themselves to disrupt traditional industries like credit risk assessment," said Bejul Somaia, managing director, Lightspeed Advisory Services India Pvt. Ltd, the local unit of US-based Lightspeed Venture. "The question becomes how will companies benefit from this."

Somaia, who is on the lookout for more investment opportunities in the space, said that in the past two years the number of enterprise technology-focused opportunities in India has increased. "It is still early. Are we seeing enough? Not yet. But the trend line is very positive," he said.


Start-up opportunities There are two segments being looked at by entrepreneurs for starting in big data—building pure technology infrastructure for managing the information, and analytical software that help enterprises in specific industries.

"The other problem we face and which has kind of motivated us is that there is not enough data available about India as such—and there is not enough data available on the Web. In countries like Europe and the US, anything and everything is available on the Web," said Sanket Patil, head of product strategy of Bangalore-based DataWeave.

The DataWeave founders Karthik Ramesh and Vikranth Ramanolla trained their attention on the highly competitive and growing e-commerce market in India and developed a platform that would analyse huge chunks of data and offer competitive analysis of companies. Their aim was to "democratize data access" so anybody could have access to information for a small fee. Their flagship product PriceWeave offers pricing data and other competitive analysis for e-retailers such as Flipkart and Jabong.

DataWeave, founded in 2011, recently garnered close to Rs.1 crore in funding from Blume Ventures, 5 ideas TLabs and a group of angel investors.

The founders are now working on scaling their data products beyond India to markets such as Europe and the US through partnerships with data sellers. Currently, DataWeave is running a pilot project with a few online retailers outside India.

"We are approaching this as a global play. As the business model has been validated in India, we are looking to expand into other markets," said Patil.

Qubole, founded by former Facebook engineers Ashish Thusoo and Joydeep Sen Sarma, is based on Apache Hadoop, an open source software framework, and offers cloud-based Qubole Data Service that focuses on making analytics accessible to all kinds of enterprises. "Our clients typically tend to be high-tech firms," said Sarma, co-founder and head of the Bangalore and US-based company.

Formcept’s Suresh Srinivasan and Anuj Kumar offer an analytics software that drastically reduces the time it takes for companies to collect, organize and store data from various sources, including social media websites Facebook and Twitter, and handles most of their data infrastructure problems.

The Bangalore firm also offers competitive analysis of companies in a particular domain. For example, in e-commerce, Formcept’s software can be used to analyse and highlight the differences between products sold on Flipkart, Myntra and Jabong.

"Typically, a data scientist or analyst spends 80% of the time looking at things like data capturing, delivery, visualization, which we’re taking away with this platform," said Srinivasan. "What we’re trying to do is solve the data infrastructure issues, which includes data capturing, data analytics, data delivery, data visualization and data management."

Another Bangalore-based firm Bizosys Technologies Pvt. Ltd’s HSearch software is a patent search technology. The company is building new solutions on it and is in talks with a few investors to raise funds. "We are looking to raise $2 million," said Sridhar Dhulipala, director-solutions, co-founder, Bizosys.

BloomReach says it generates 94% average annual incremental revenue for its customers through its BloomSearch product. "We are tied to a company’s revenues. Unless we make a financial impact, we don’t make money," said Vinodh Kumar, head of BloomReach India. The company raised $5 million, $11 million and $25 million in three rounds of funding.

Other promising Indian start-ups with specialized analytics technology are Mitra Biotech Pvt. Ltd and Iken Solutions Pvt. Ltd.

Mitra Biotech’s software offers personalized therapy for cancer, analysing the effect of multiple drugs on cancer cells and recommending the best treatment for a patient in shorter than a week.

Iken Solutions, which was founded in 2008 and has so far received about $2 million in funding, counts Bharti Airtel as its biggest customer in the mobile value-added services analytics market.

For Bharti Airtel, India’s biggest telecom firm with more than 260 million subscribers globally, Iken uses its software to analyse the huge volume of data generated by the telco’s subscribers and personalize value-added services such as caller tunes and ringtones for each user.

Another Bangalore-based big data start-up, Frrole, uses analytics to sift through massive chunks of news data. The algorithm can tell a newsworthy Twitter post from a comment or a reply and sorts about half a billion posts a month based on four different analyses—metadata, language, semantics and statistics.


Small market

For the founders of Formcept, which was incubated at the Indian Institute of Management in Ahmedabad, the biggest challenge so far has been convincing companies in India about the value proposition of spending on a big data platform, with many small- and medium-sized businesses still hesitant about embracing and spending on new technologies.

"India is lacking in that arena where companies are more open to embracing newer technologies, unlike (in) the US," said Srinivasan, who previously worked at IBM.

Qubole’s Sarma, too, said one of the biggest challenges for start-ups in India is getting access to potential clients. "People are more risk averse, they stick to other solutions that they are aware of," he said.

The key market for home-grown firms, in fact, lies outside the country. According to technology researcher Gartner Inc., global spending on big data is expected to drive about $34 billion of overall information technology (IT) spending in 2013, up from about $28 billion in 2012.

Wal-Mart Stores Inc., the world’s biggest retailer, last month acquired Silicon Valley-based analytics start-up Inkiru to build its e-commerce capabilities by using their predictive analytics platform, as it looked to compete with Amazon Inc. For Indian big data start-ups such as DataWeave that focus on e-commerce it would make sense to target bigger markets such as the US, say experts.

They don’t think India as a market will support significant revenue scale for big data companies. "They may be able to build and test product here, but will ultimately have to target other markets to achieve scale," said Somaia of Lightspeed Advisory Services.

Original article

Startups identify market needs; academics & entrepreneurship slowly joining forces in India Apr 26, 2013

Unlike in the West where academic research has close links with industry the brightest minds in India have tended to bury themselves inside laboratories, ignorant of the pulls and pressures of the market. But thanks to a series of new emerging businesses founded and run by Indian academics, the tide may just turn now.

A small, but growing, number of startups that identify market needs and commercialise their research have appeared on the Indian entrepreneurial landscape. These are spread across sectorsâ€"from life sciences and energy efficiency to education services. "Compared to the West, the ecosystem here has not really allowed academia to play a stronger role in fostering entrepreneurship," said Ashwin Raguraman, chief operating officer at the `100-crore India Innovation Fund, a venture capital fund that invests in innovation-led, early-stage Indian firms. "They continue to face peer pressure, which has, perhaps, constrained commercialisation of their research."

It's a chasm that academics Vijay Chandru, Rajendra Sonar and Shashikanth Suryanarayanan are hoping to bridge. "The company is an extension of my academic pursuits. What is the point of confining your research to the laboratory?" said Rajendra Sonar of iKen Solutions, who is testing the commercial value of his research in Asia's third-largest economy. "You have to find ways to unlock its value."

His firm iKen Solutions, incubated in Indian Institute of Technology-Bombay in 2008, has developed a hybrid artificial intelligence product that can be used to understand a consumer's online purchase behaviour.

While Sonar continues to be a faculty member at IIT Bombay's SJM School of Management, the day-to-day running of the venture is looked after by a professional chief executive Siddharth Goelâ€" similar to the model followed in the United States. Another company founded by a professor-turned-entrepreneur is Pune-based Sedemac Mechatronics, started in 2008 by IIT-Bombay mechanical engineer professor Shashikanth Suryanarayanan when he was leading a research group.

"This is not everybody's cup of tea," said Suryanarayanan. "You have to be an entrepreneur and be able to sell a dream to different people." What started as a small lab-based enterprise in the IIT Bombay campus has now grown into a company that supplies unique control products to leading engine manufacturers, such as Mahindra & Mahindra, Kirloskar Group, TVS Motors and Tata Motors. The company has developed engine and powertrain control products that deliver fuel efficiency or increase performance.

"Solutions that can be monetised are coming out of research labs in India. And as an investor that's what I'm looking for," India Innovation Fund's Raguraman said.

One of the first such ventures is Bangalore-based bioinformatics company Strand Life Sciences. Founded in 2000 by professors at Indian Institute of Science, the company conducts several precision DNA tests to identify genetic mutations through its proprietary software. "Our game-plan at the time of creating the company was to create the Google of genomics," said Vijay Chandru, chief executive at Strand Life Sciences. Currently, Strand's tools are being used by 2,000 laboratories all across the world, including Karolinska Institute in Swedenâ€"one of Europe's largest medical universitiesâ€"and America's Lawrence Livermore National Laboratory, which is focused on nuclear and basic science.

Earlier this year in February, diversified global financial advisory firm Burrill and Co invested an undisclosed amount in the company, the proceeds from which will go towards Strand's expansion into global markets as well as consolidate its position in precision diagnostics in the healthcare space.

"Interaction between industry and academia in the US is constant, unlike here in India. We need collaborative effort," said Krishna Tanuku, executive director at Wadhwani Centre for Entrepreneurship Development at the Indian School of Business, Hyderabad.

But the consensus remains that there has to be significant shift in mind-set. Not just from academia's point of view, but also in the way the other stakeholders, including venture capital, look to stimulate entrepreneurship in India.

"Indian academics have to take more risk. There has to be more inter-disciplinary research. You have to look at working sideways. Stop being in a silo. There is a very vibrant local market here, but one has to take advantage of it," Chandru said.

Vinay Viswanathan, founder and chairman at LimberLink Technologies, said there are very few funds that actively look to market research in India. "Even though we cater to the domestic market, we still need money.

The risk taking ability is absent from both sides. The role played by India's premier academic institutions in fostering entrepreneurship is also under scrutiny. "In the US, academics are also involved in creating their own ventures...I don't think there are too many examples of that in India. So, how do you expect them to convince students to go down the entrepreneurial road?" pointed out Amit Kapoor, chairman of Gurgaon-based think-tank Institute of Competitiveness. "In the end, we are all socialists trying to teach capitalism."

For Your Treatment Only Feb 3, 2012

Two Indian-origin scientists in the United States felt the world needed to rethink conventional drug therapies for cancer patients. Pradip K. Majumder, a professor of oncology at the Harvard Medical School, and Mallik Sundaram, a faculty member at the Massachusetts Institute of Technology, formed a company called Mitra Lifesciences in 2008, but the technology they envisioned needed to be tested on a large group of patients.

India called. They moved to Bangalore, dissolved Mitra Lifesciences and in 2009, incorporated a new entity in India, Mitra Biotech. The company has since stirred much debate in scientific circles with its technology platform, Oncoprint, which analyses - in just seven days - a range of drugs to arrive at the right fit for a cancer patient.

"Cancer is a genetic disease. Every cancer is different. There is a big mismatch today between the drug and the patient," says Majumder. He cites the example of HER2+ cancer, a type of breast cancer. All HER2+ patients are administered a drug called Herceptin, which has a multi-billion dollar market. "The problem is that if we give the medicine to all HER2+ patients, only 30 to 40 per cent respond and are cured. Our technology accurately predicts which patients Herceptin will work on. Other patients can opt for other drugs," he adds. Such an approach is also cost effective, since anti-cancer drugs are all very expensive. Depending on the type of cancer, a patient could spend up to Rs 50 lakh a year.

Mitra Biotech's technology of arriving at a suitable drug is different from approaches of many other scientists and companies in the segment. Some companies are focusing on what is called a 'biomarker-based' approach to figure out the likelihood of response to a particular treatment. Biomarkers are substances found in the blood that help determine a disease. Biomarkers are better suited to find out which drugs may not work in a group of patients rather than trying to predict which ones may work best on a patient.

Some companies, such as US-based Champions Oncology, use the 'xenograft mouse-based' diagnostic model to determine personalised cancer treatment - the human tumour is transplanted in mice where it is allowed to grow and then tested with different drugs. The xenograft model, asserts Majumdar, has its limitations since it takes three to six months for the tumour to grow inside the mice and by then the similarity with the human tumour may be lost. And not all human tumours grow in mice.

Mitra's technology is based on a real-time experiment. The company cultures the cancer tumour in an incubator, giving it the same micro-environment on a laboratory plate it would have inside the body. Drugs are then introduced into the tumour and each of them tested for the response. An algorithm collates all the data, compares the drugs and ranks them based on the suitability for a particular patient.

Mitra's only customer so far has been HealthCare Global Enterprises (HCG), a cancer-care provider with a network of 25 centres across the country. Founder and Chairman Dr. B.S. Ajaikumar, a reputed radiation oncologist, believes Mitra is special. "The idea is very good. It could be path-breaking if it works out," he says.

The early response from patients has been encouraging, but the company still has a long way to go, adds Ajaikumar. "It is a study in progress and we are still collecting the data and doing comparative studies," he says. Mitra currently charges $600 (Rs 33,000) from a patient. HCG says using Mitra's approach is a voluntary offer made to patients. The company says it gets about 40 patients per quarter and expects to end 2012/13 with revenues of $100,000 to $120,000. Next year, it expects at least 500 patients in India.

The start-up is now eyeing the more lucrative US market as well. It is validating its technology with the Cancer Treatment Centre of America, a forprofit hospital chain. "The business delta is much higher outside India. For the same technology, we can bill patients at $4,000," Majumder says.

There are very few Indian biotech companies that have been able to make it big abroad. Mitra, whose tag line explains its name - "your friend in the fight against cancer" - may just reverse the trend.

Source

Investors re-invent the start-up economy November 30, 2012

The eagerness to invest in original and innovative ideas makes India a competitive market for investors. An investor always hunts for the unique value proposition offered by a start-up that will have a quantum of impact on the current state of things.

Apart from established MNCs aiding new ventures, the trend is now leaning towards investors giving life to start-ups. Marching on with experience in their own sectors, investors are now confident to assist projects monetarily, ranging from a few lakhs to crores, and also to share their network with budding entrepreneurs.

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Public funding in life sciences zooms October 08, 2012

There has been a steady increase in public investments in the areas of building infrastructure and expanding R&D efforts, mainly in the product development expansion. The approximate budget for biosciences investments is upwards of $650 million Apart from declaring 2010-20 as the "Decade of Innovations", the Government of India is currently in the process of formulating a new science, technology and innovation policy. Expected to be released in early 2013, the policy would reiterate the Government's resolve to increase the R&D spending to two percent of the GDP by 2017. With respect to number of publications in scientific journals or number of patents filed and granted, there are some early evidences of improvements in our global competitiveness.

Speaking at an international conference recently, Vayalar Ravi, Minister of Science and Technology, Government of India revealed, "We foresee an opportunity for optimization of investments into R&D when we build on collaborative excellence. Sharing objectives, co-investments and co-generation of values to people through science seem to me as a new paradigm."

The government agencies have been offering various types of research grants, fellowships through soft loans or equity, to conduct research in various fields of biotechnology and commercialize indigenous biotechnologies. There are three major departments under the Ministry of Science and Technology (S&T), Government of India; each with its own mandate and funding programs. These include the Department of Science and Technology (DST), the Department of Biotechnology (DBT) and the Department of Scientific and Industrial Research (DSIR). Besides that Indian Council for Medical Research (ICMR) and the Council for Scientific and Industrial Research (CSIR) and Indian Council of Agricultural Research (ICAR) play a major role in the promotion of biotechnology in the country.

Over the last five years, there has been an increase (up to 25 percent) in the public funding to promote research, across all the government agencies. The budgetary provision for S&T spending witnessed a 10 percent hike in the recent Budget. During the budget 2011-12, the Ministry for S&T received a total of 5,679 crore. The allocation for DBT, DSIR, and DST was 1400 crore, 1930 crore, and 2349 crore respectively. This amount in the current budget 2012-13 was 1,485crore (DBT), 2013 crore (DSIR) and 2,477 crore for DST.

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The Little Engine That Saves Fuel September 20, 2012
The founder: Shashikanth Suryanarayan, professor, department of mechanical engineering, IIT-B
His Startup: Sedemac Mechatronics
What It Does: Builds products to help small engines go green
Funding: Nexus Venture Partners, India Innovation Fund
Roadmap: To build a sizeable business in control solutions


If you ask an academic to explain why his work matters, you’re likely to get one of two answers. He’ll tell you his work is being published in high-impact journals and how his students are benefiting, garnering doctoral degrees. Or, he’ll tell you how it has great industry potential. It’s very unlikely that he’ll give you both the answers together.

At IIT-Bombay, mechanical engineering professor Shashikanth Suryanarayanan is one such unlikely example. Through his company Sedemac Mechatronics, he wants to build a sizeable business around environment-friendly engines; by teaching at the Institute he wants to create a base of students with expertise in the suite of electronic systems that regulate small engines for fuel efficiency and reduced emissions. So far, he seems to be in control of how he operates in the two worlds.

"How I work as an academic is completely different from how I work in the company. The link is only in technology," he says. At Sedemac, while he doesn’t run the daily operations, he takes all decisions on products, pricing, markets and, most importantly, on building relationships. His customer list has marquee names like Tata Motors, Mahindra & Mahindra, Ashok Leyland, Kirloskar.

"Shashi is a star; honest and totally driven," says Rajesh Rai, chief executive of India Innovation Fund, which, along with Nexus Venture Partners, has invested in Sedemac. Such people, who straddle both the worlds efficiently, are rare, he says. Rai was a partner at the New Markets Venture Partners fund in Washington and served as a business reviewer in Small Business Innovation Research programme, one of the most successful early-stage technology commercialisation schemes of the US government.  

But Suryanarayanan didn’t start with a focussed business idea. Before returning to India in 2004 from the US, he made turbine control systems for GE’s wind energy business. At IIT, all he wanted was to build an active research group. Because the technology naturally lent itself to commercial application, entrepreneurship came up as an option. He was already pondering how to keep the research group together, preventing them from "drifting apart" in their respective pursuits. Sedemac was founded in 2008.

Today, most genset manufacturers use the ‘electronic governor’ that Sedemac builds. It’s a device that enables variable speed engine action, allowing the engine to run at its best fuel efficiency. A senior engineer at one of the largest automotive manufacturers, who has deployed this device for the last two years, finds this "compact device efficient and robust"; he prefers it to international brands like Woodward and GAC, which come at two or three times the price.

In all, over a dozen products are in the market in the small engine and power train control space that includes the voluminous 14-15 million two-wheeler market. It’s an area the West has not paid much attention to. If one defines a focus like this, says Suryanarayanan, one can have a huge market to serve with multiple products.

After an initial jitter of market acceptance, particularly because few Indian companies ‘develop’ technologies and fewer still buy them, he is "pleasantly surprised" at how his products have been received. A business worth $30-100 million is what he hopes to build in the next five years. "If you realise that [$30-100 million] in the first few years, you’ll be one of the fastest growing companies anywhere," he says.

It was this market focus that got him seed money from Nexus within six months of setting up the company. Initially, he had a vague idea about government grants and loans, but now he is convinced that that’s not the way to go.

"Governments everywhere are friends of big businesses, not of startups," he says. In India, an additional disadvantage is that a large number of proposals queue up before government agencies which don’t necessarily have the "technical expertise to do due diligence".

Those who have a clear vision about the marketplace and know their competitive position, will find people to finance them. This Suryanarayanan is sure about. But what about academics who cannot handle the "baggage" that private capital comes with? "You have to understand what you are getting into because investors are not looking at small, nice businesses. In that case, you are better off bootstrapping, and there’s nothing wrong with that," he says.

So far, this 35-year-old professor has managed a good balance at both workspaces, but soon there’ll come a point when he’d have to make a choice. "I know I will be torn between the two roles and I’ll have to make a call, but I can’t tell you what call I’ll make because I don’t know myself," he says with a chuckle.
India Innovation Fund and IAN co-invest in medical devices startup Consure Medical September 5, 2012

Prior to the series A investment, the firm received grants from Stanford-India Biodesign, Department of Biotechnology and Johnson & Johnson.

Early-stage VC investor India Innovation Fund and Indian Angel Network (IAN) have announced an undisclosed quantum of investment in Consure Medical, a Delhi-based medical devices startup.

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India Innovation Fund invests in IIT Bombay research spin-off, iKen Solutions August 10, 2012

iKen Solutions Private Limited, an IIT Bombay research spin-off has received funding from India Innovation Fund (IIF). Co-promoted by Dr.Rajendra M. Sonar, a professor at IIT Mumbai and serial entrepreneur Siddharth Goel, iKen Solutions has developed Mooga, a state-of-the-art hybrid artificial intelligence analytics framework for personalization at the individual consumer level in real time. The technology will enable consumer centric companies in Telecom, Digital Content Delivery, Media, Internet, and Banking and Financial Services provide a high degree of personalised service to their customers.

Mooga can integrate into any web service, application, or access interface that aims to deliver personalisation at an individual level. With algorithms that combine multiple artificial intelligence techniques, it overcomes prevalent challenges in content discovery; treating individual customers according to their personal tastes and behaviours; monetizing content; reducing customer churn and carrying highly targeted campaigns.

Sharad Sharma, former CEO, Yahoo R&D, India, and Ashwin Raguraman, Vice President, IIF will join the board of iKen Solutions as India Innovation Fund nominees.

Siddharth Goel, Chief Executive Officer, iKen Solutions said, "By providing real time personalisation at the individual level, Mooga brings a paradigm shift in the way markets will treat customers. From a ‘great to have’ technology, personalized analytics has emerged as a ‘must have’ technology. The investment from IIF will help us scale our execution capability and at the same time help leverage collaborative linkages and access markets."

Ashwin Raguraman, Vice President, India Innovation Fund said, "Providing unique customized experience to a consumer will be the cornerstone around which businesses will differentiate themselves. iKen Solutions’ analytics platform, developed over years of research, will help industries catalyze business transformation to benefit customers. iKen is already working with strategic partners of our Fund. iKen’s solutions being relevant across multiple sectors, we see its engine powering multiple internet, mobile and financial service businesses in the days to come."

India Innovation Fund, Blume Ventures invest in Shantani Proteome Analytics July 17, 2012

The startup was incubated at the National Chemical Laboratories’ Venture Center in Pune.

India Innovation Fund, which focuses on early-stage investments, has invested an undisclosed amount in Pune-based Shantani Proteome Analytics Pvt Ltd, along with Blume Ventures.

Founded in 2010, Shantani is a biotechnology company, which develops technology applications for drug discovery organisations and also develops in-house drug discovery programmes in defined therapeutic areas. It also offers drug target identification, validation and mode of action studies services. The startup was incubated at the National Chemical Laboratories’ Venture Center in Pune.

"We have an innovative and exciting technology in the niche area of drug (target) discovery. However, to grow our business, we were not only looking for capital but the right partners with the understanding of technology-driven businesses and a strong network in life sciences to help take our startup to the next stage," said Chaitanya Saxena, CEO of Shantani.

India Innovation Fund, formerly known as NASSCOM-ICICI Knowledge Park Innovation Fund, is a $25.3 million venture capital fund managed by IKP Investment Management Co. Pvt Ltd. It invests in automotive, infotronics & intelligent transport systems, telecom technologies, and drugs & pharmaceuticals, and invests between $0.12 million and $1.2 million in its portfolio companies.

The sponsors of the fund are Tata Consultancy Services, Bharti Airtel and ICICI Knowledge Park.

During the past two years, the fund has invested in three other companies including SEDEMAC Mechatronics Pvt Ltd, SureWaves Media Tech Pvt Ltd and Mitra Biotech Pvt Ltd.

"Shantani has developed a unique technology platform with significant benefits for drug design and development. We look forward to supporting the company through the IIF network," said Rajesh Rai, CEO of India Innovation Fund.

Blume Ventures acts as a seed-stage investor and seeks to invest in data infrastructure, biotech, R&D, mobile application and consumer internet sectors. It typically invests $0.05 million-$0.25 million in seed round and $0.5 million-$1.5 million in later stages in its portfolio companies. Recently, it has invested in HashCube Technologies Pvt Ltd, along with the Indian Angel Network.

India Innovation Fund Bets On Startups In Which Innovation Is The Competitive Advantage January 20, 2012

In a chat with Rajesh Rai, CEO of India Innovation Fund

YourStory.in brings you a conversation with Rajesh Rai, CEO of India Innovation Fund. Innovation is often a misused word in a startup context. But Rajesh is a pro with close to a decade experience dealing with innovation-led startups in the US. He explains the key focus areas of the fund and also succinctly brings out the difference between the US and India in terms of the ecosystem. He clearly points out what India Innovation Fund is looking to invest and the sectors of interest. Having invested in three companies already, the fund aims to expand in 2012. Rajesh also shares his description of an entrepreneur being one himself sometime back and thinks building a strong team is imperative to performance, be it a VC or a startup.

Name of the fund: India Innovation Fund

Founded: 2010

Promoters: The fund is promoted by NASSCOM and IKP Knowledge Park. The investors of the fund are DST, TCS, SIDBI, Airtel and IKP Trust

Philosophy of the Fund: To support early stage startups. There are not too many funds supporting innovation led businesses in India. In addition to that the idea was to provide a network of quality mentors to be able to help the companies move forward. The idea is to fund innovation-led companies and to help them grow.

Sectors of interest: IT and life sciences. To some extent, it represents the competencies of the promoters, NASSCOM being an IT body and IKP Knowledge Part being one of the largest life sciences R&D centers in India.

Rajesh Rai joined the fund as CEO in April 2010. The fund is based out of Bangalore. Rajesh and Ashwin along with the advisor Anjana manage the fund who together take care of operations, the deal making and the deal flow. In addition, a board and an investment committee, which has well-known entrepreneurs like Dr. Bala Manian, guide the fund. At least four investments are planned in 2012.

Rajesh started a fund in the US called New Markets Venture Partners in 2002, and invested in around 20 innovation-driven companies. He says, "I am kind of doing the same thing in a different country now. I have been in the business for a while now." Talking about the size of the investments, he explains: "We are putting anywhere in between $100,000 dollars and $1 million."

The deals are sourced initially through talks but Rajesh feels through the network, the fund has gained good traction and has been able to invest in very good companies.

Investments so far: 3 companies
1. Mitra Biotech. Sector: Life Sciences. Very strong team backing the company prompts investment.
2. SEDEMAC. Sector: IT. Service: Embedded software for engines. It is a combination of software and mechanical engineering.
3. Surewaves. Sector: IT. Service: Technology focussed on media businesses. The platform utilizes cloud technology and significant number of patents filed around it.

Talking about these investments, Rajesh points out, "What we are looking for is core innovation which would drive the company, and innovation should be their main competitive advantage, and innovation that can enable something that didn’t exist before."

To our query if the fund is looking to invest in companies that are solving very India-specific problems, he disagrees saying, "I would not put ourselves in a box, but that would be a focus for sure. What we are saying is that can the company address a real problem, and can we help the company through our networks. We would love it to be a India-specific problem, and are looking for companies that can compete globally."

Rajesh’s take on being a VC in the US vs. being a VC in India "I think the energy levels are higher in India at this point in time. The white spaces and opportunities do exist. There is lesser depth in terms of being able to build teams. When you have many years of experience in the startup ecosystem, it becomes easier to put teams together. It is happening, but it is still tougher in India. I think large customers need to learn to work better with startups in India.

In the US, acquiring a large customer is easier. In India large customers don’t treat startups too well. So in India it is a little tricky to acquire customers who can provide good margins for you. There is a growth in the consumer market here, which is real and strong. To be able to build good teams, you got to have very good founding teams. In India it is tougher to get employees who will hold equity as team members. It is also because we haven’t had that many mega exits as well. I guess that is where we are different from the US. But, the general traits of the entrepreneurs themselves are very similar."

Traits of successful entrepreneurs in Rajesh’s view "Somebody who is persistent, somebody who can build a team, and someone who can be flexible. I think these are the main traits of successful entrepreneurs. You can’t be in totally wrong market, things always change, and you got to have the courage to accept that and change."

Rajesh signs off saying, "One of the key things that people should look at now is to build teams. It is helpful. Build teams that take your company from point 1 to point 2, in a finite period of time."

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IIF, Nexus invest in SEDEMAC’s second round of fund-raising September 10, 2011

Pune-based SEDEMAC Mechatronics Pvt. Ltd, founded by a professor at the Indian Institute of Technology, Bombay (IIT-B), has raised a second round of funding from Nexus Venture Partners and India Innovation Fund (IIF). Financial details were not disclosed.

The firm makes electronic control modules to increase fuel efficiency and reduce emissions.

"We don't come across these kinds of companies very often. In three-five years time, we expect the company to take a leadership position." said Ashwin Raguraman, vice-president, IIF, an early-stage venture investor that backs companies with intellectual property (IP) in emerging technologies.

While Nexus invested an undisclosed sum in SEDEMAC in 2008 as well, IIF is making its first investment in the company.

SEDEMAC sells its modules to original equipment manufacturers (OEMs) of parts for heavy vehicles such as forklifters, cranes and bulldozers as well as to component suppliers for two- and three-wheeler makers.

It also provides electronic speed governors for diesel or gas powered engines and gensets to help reduce fuel consumption and improve power quality.

SEDEMAC, founded in 2008 at IIT-B's incubation centre Society for Innovation and Entrepreneurship, will use the corpus from its second fund-raising for research and working capital requirements, said co-founder and director Shashikanth Suryanarayanan, a professor in the department of mechanical engineering at the institute.

"Part of the capital will go into our continued research and development work. We will also utilize the capital for financing our supplies," he added.

SEDEMAC "is working with leading small engine manufacturers in India. The latest capital infusion will help it in expanding into new applications", Sandeep Singhal, co-founder and managing director of Nexus, said.

"As increasingly more and more two-wheelers move towards emission control, there will be an enhanced requirement for the kind of products that SEDEMAC has," he said, also pointing to potential demand for diesel gensets used in telecom towers.

"SEDEMAC's energy monitoring technologies will find takers. It's a good technology. But how does one make a fast-scaling business out of it remains to be seen," said Sanjay Anandaram, an entrepreneur-turned-investor. "One has to see this in totality. How does one build a business around the technology?"

Suryanarayanan agreed the business will need time to scale up but said over the long term, it can emerge a formidable winner. "The deals that we get are for years. Scaling up is possible if one has a business in place, catering to the demand of each OEM," he said.

Separately, IIF, backed by the National Association of Software and Services Companies (Nasscom) and IKP Knowledge Park, said it expects to complete securing investor commitments for its Rs.100 crore first fund by the end of the year and may consider raising another fund.

"We may look at raising another fund, and, for it, we may relax our focus on IP-driven tech play. We may look at a broader gamut," Raguraman said, adding that the fund will not invest in sectors such as real estate or restaurant chains where technology is not involved. "Our real value is in information and communication technologies."

IIF, which has invested in three companies so far, including SEDEMAC, is carrying out due diligence on at least two more start-ups, Raguraman said. IIF typically invests up to $1 million in a start-up and is open to co-investments. It expects to invest in at least two to three companies this year from its first fund.

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Funding Innovation August 26, 2011
SureWaves gets VC fund August 16, 2011

Bangalore: SureWaves MediaTech, a Bangalorebased digital media-technology company, has received Rs 10 crore as early stage venture capital from India Innovation Fund and Accel Partners.

The company, founded by Raj Khare, who earlier headed Broadcom India, offers the SureWaves Media Grid, an integrated advertisement aggregation, content delivery, network management , media planning and reporting platform.

Rajesh Rai, CEO of India Innovation Fund, said SureWaves had built an innovative product that enables advertisers to cost-effectively reach a large targeted audience in dispersed markets.

Original article

IIF invests Rs. 10 crore in Bangalore start-up August 16, 2011
India Innovation Fund to invest Rs. 10 Crore in Sure Waves Media Tech August 16, 2011

India Innovation Fund, best known as the only domestic venture fund that is backed by software services major TCS and telecom leader Airtel, has closed its second investment.

The fund, in partnership with global early stage investor Accel Partners, is investing Rs 10 crore in Bangalore-based digital media-technology start-up Sure-WavesMediaTech.

Full article

Perfect Formula July 24, 2011

"The greatest challenge in cancer therapy is to know who isn't going to respond to treatment, who is, and to what extent." says Ajai Kumar, chairman, HealthCare Global. Oncologist Kumar runs a network of private cancer hospitals in the country. He has seen people whose cancers grew in the face of advanced treatment and others who turned cancer-free with minimal intervention. He has failed to understand why.

To help answer some of these questions, HCG partnered Bangalore based start-up Mitra Biotech founded in 2009 by researchers from MIT and Harvard. "Our core value is our ability to do patient segregation, to match drugs to patients." says Mallikarjun Sundaram, the Bangalore-based co-founder and CEO of Mitra and also adjunct faculty at MIT. In other words, to personalise cancer medicine — an area of research into which governments, small biotechs and large pharmaceutical and diagnostics companies have ploughed millions over the past decade.

Read the full article
Technology start-ups get VC fund fillip July 21, 2011
The Rise of the Innovatopreneur by Ashwin Raghuraman, Vice President, India Innovation Fund July 21, 2011

A couple of years back I shared a ride to the Airport from an Innovation event with the Head of R&D at a Multinational which developed cutting edge technology. We got talking on new areas that his company was working on and he shared with me their progress on cutting edge technology they had developed applicable in healthcare space. Impressed at what I had just heard, and told that this would take a couple of years to become a commercial offering, I was curious to understand how far behind competition were on this technology. "We are not concerned about our obvious, large competitors – we know exactly where they are," I was told. "What we are worried about is that there is a start-up somewhere in a corner of India which has built technology that can compete with ours."

This statement alone is a testimony of the quality of cutting edge technology that has begun to emerge from young firms in India. Be it the need to survive and distinguish themselves in an environment where technology firms are mushrooming all over the place, the inclination of a generation of professionals with significant experience in a domain turning entrepreneurs, the emergence of India as a significant market or the gradual maturing of the entrepreneurial ecosystem, the number of innovative, high technology start-ups I have seen since, provides enough evidence to corroborate that statement.

Consider the case of a start-up in the engine electronic space, in which we, the India Innovation Fund, will close an investment shortly. This firm has managed to deliver a cost effective solution (at half the price point of its global competitor) to its clients – OEMs in low margin businesses – not through labour arbitrage, or on account of low component cost. Their ability to reduce costs has been driven by a complex technology solution where they have used software algorithms to perform a high precision task hitherto performed by hardware. We see this trend across multiple sectors – the medical device space, telecommunication equipment, manufacturing and automotive sectors, clean technology and more.

The challenge however is to convert innovative technology offerings into successful commercial ventures. The bridge is the business model. A lack of a practical and efficient business model is what has led to the demise of many technology start-ups which had advanced new technologies. It is therefore heartening to note that there are a few young firms which are innovating on their business models to solve unique problems. Take for example a number of start-ups, with offerings for rural India, which are grappling with innovating on the age old distribution model, hitherto exclusively in the domain of FMCGs such as Hindustan Lever. Innovation in business model has a multiplier effect on a strong technology offering. A weak business model equates to a failed start-up.

Wherein then lies opportunity for innovation for Indian start-ups? While the canvas for innovation is limitless, a space where there seems to be a dichotomy in the size of the opportunity and its address through innovative solutions is in two consumer centric markets – the consumer internet space and the mobile space. Given phenomenal mobile penetration rates in India and the unique character of the market, the factors in which innovation thrives are present. However, we haven't seen an offering which we can say has been disruptive – an offering which would kindle the imagination of many and lead to its adoption and replication by firms in other geographies. The same applies to the consumer internet space – we are still in search of that elusive start-up which will take the global consumer by storm and carry brand India along with the success of its offerings.

Therefore, while the start-up community is throwing up innovative technologies, the focus needs to be on converting a greater percentage of these into commercial successes. A few points to keep in mind which can go a long way in helping the entrepreneur enable this are:

1. Focus – the world has a lot of problems. Try solving them one at a time and not all at once. Entrepreneurial acumen demands the ability to be able to stay on the right side of the thin line that divides diversifying to mitigate risks and focussing to ensure that resources are used with maximum impact.

2. Differentiate – find your niche. "Me too" offerings are fine for lifestyle businesses. Not as true value creators. Investors therefore like entrepreneurs who have experience in the area in which their start-up operates. They know the problems more intimately.

3. Participate and allow others to participate – You need all the help you can get to make a Start-up successful. Participate in the ecosystem to enhance your abilities and allow others to participate in your start-up to draw on diverse experiences and thoughts.

4. When choosing an investor, choose Strategic value over Valuation – If you in the enviable position of having term sheets from multiple investors, it is often tempting to choose the investor who has given your company the highest valuation. Resist the temptation and choose the investor who can provide you the maximum help in making your company successful. What your company ends up being valued at is what counts, not what its value is at the early stages of its journey!

Quote: A lack of a practical and efficient business model is what has led to the demise of many technology start-ups which had advanced new technologies.

Quote: When having term sheets from multiple investors resist the temptation of going to the one giving highest valuation and choose the investor who can provide you the maximum help in making your company successful.

From SiliconIndia

IIF finalizing two start-up investments June 7, 2011
Nasscom's India Innovation Fund makes debut deal in Mitra Biotech November 23, 2010

India Innovation Fund (IIF)-led by IT industry body Nasscom and ICICI Knowledge Park Trust--has finally opened its account by investing Rs 2.5 crore in Bangalore-based Mitra Biotech, in which Accel Partners and Kitven (Karnataka government-backed fund) are co-investors.

According to an earlier VCCircle report, both Accel and Kitven also contributed Rs 2.5 crore each in the round raised by Mitra Biotech, a translational biotechnology company focussed on oncology, founded by a team of scientists from MIT and Harvard Medical School. Its co-founder and CEO Dr Mallik Sundaram is an alumnus of Wharton Business School, MIT, University of Utah, while the two other founders include Prof. Charles L. Cooney of MIT and Dr. Shiladitya Sengupta, assistant professor of medicine at Harvard Medical School. Cooney also serves on the board of two leading biotech firms, Biocon and Gnezyme.

In another significant development, the fund has roped in Rajesh Rai, who co-founded New Markets Venture Partners, as CEO. Rai confirmed the debut deal to VCCircle. Rai says, the fund will follow an active co-investment strategy that will allow investee companies adequate runway to play out their business models.

Rai, who boarded the fund six months back, is the second CEO to be appointed. The fund had initially named Ganapathy Subramaniam, formerly with Jumpstart Ventures, as CEO but he quit on personal grounds. Deepanwita Chattopadhyay, CEO of ICICI Knowledge Park, acted as CEO in the interim period.

Rajesh Rai brings over 14 years of venture capital, corporate and entrepreneurial experience to his position. He co-founded New Markets Venture Partners (NMVP), a leading VC fund in the Washington DC region with $50 million under management and 19 portfolio companies. He has worked in NMVP through the lifecycle of fund raising, investing, building and exiting investments. Prior to co-founding NMVP, Rajesh launched new businesses at Godrej-GE Appliances, worked on product planning at Federal Express, optimised product design at Kirloskar Electric and managed an educational services franchise. He is part of the Adjunct Faculty at the University of Maryland's Executive MBA programme. He has an undergraduate degree from NIT Surathkal and an MBA from the Smith School of Business at the University of Maryland.

The innovation fund, which currently has an investment corpus of Rs 50 crore, had targeted a final close of Rs 100 crore, when it was announced three years ago. Sidbi is the latest contributor (Rs 10 crore) to the fund, whose other investors include Tata Consultancy Services, Bharti Airtel Ltd, ICICI Knowledge Park Trust and the department of science and technology.

Excerpts from our conversation with India Innovation Fund CEO Rajesh Rai, where he talks about the investment strategy and India's entrepreneurial ecosystem:

Can you explain the India Innovation Fund's investment strategy?
We are looking to invest in innovation driven, early stage India focused companies. We feel there is a serious lack of capital in this space. Our initial focus in on companies in the healthcare and information technology sectors. As we work with a potential portfolio company, we hope to be able to bring IIF's extensive customer and advisor network to help further the business even prior to making the investment decision. Through such active diligence we will be able to, of course, make an informed investment decision while being able to add value immediately after the investment.

In addition to adding value through getting an experienced advisor from our network to help our companies, one of the key elements of our investment strategy is to be able to catalyse additional investments around our initial investment.

What's the kind of average deal size that you will go after?

We could invest Rs 1 crore ($250k) to Rs 5 crore ($1.25 million) through IIF, either alone or as part of an investment round of Rs 3 crore ($0.75 million)-Rs 15 crore ($3.75 million). We could go alone of course but would like to work with the company to form an investment syndicate. Our aim is to provide our companies enough runway to validate their business model, get to value creation events and ideally of course to cashflow positive, before they look for additional capital. We would like to help our companies spend less time on fund raising and be more focused on building their company.

What are the challenges you face as an investor in innovation driven early stage companies?
I have been tracking the Indian early stage market for a few years. Quality and quantity of early stage deal flow has gone up tremendously. I think the growth has driven a host of factors including global Indians returning to take advantage of the India opportunity, highly driven and educated young Indians who see entrepreneurship as a viable career option and of course experienced corporate executives who are getting off the corporate ladder to be part of the India growth story through entrepreneurship. Most importantly with a fast growing and fairly large domestic market and a greater depth of management talent to build quality products, India now offers a reasonable test bed for innovation driven companies.

The challenge is to find the right teams that are pursuing scalable ideas driven by innovation. And then to be able to provide them enough support - either in completing their teams, providing access to customers and additional capital. Early stage investing is a resource-intensive business. We are looking to build partnerships with local and global investors, corporations and government entities who have an interest in being part of the 'India Innovation' opportunity.

There are of course liquidity/exit challenges. We believe that if we can help provide our portfolio companies an environment to achieve significant milestones in reasonable time periods - exits will come. Either through secondary transactions or the acquisition/IPO route.

 

India Innovation Fund achieves 1st close of Rs. 40 crore October 30, 2009

After several false starts, India Innovation Fund (IIF)-led by IT industry body Nasscom and ICICI Knowledge Park Trust--which was announced almost two years back, is now finally good to go.

The fund has achieved its first close of Rs 40 crore--raised from domestic sources such as Tata Consultancy Services, Bharti Airtel Ltd, ICICI Knowledge Park Trust and the department of science and technology. Its launch is as close as in a week or 10 days.

The fund had originally planned to raise Rs 100 crore. "We are still confident of achieving the target," Nasscom vice-president Rajdeep Sahrawat told VCCircle.

The IIF, which has been in the making for some time now, has faced several hiccups along the way. Satyam Computer Services, whose founder B Ramalinga Raju confessed to committing financial irregularities, was one of the key anchor investors of the fund, when it was proposed. It is not clear if the new owners Tech Mahindra, who subsequently bought out the troubled Satyam, will look at investing in the fund. The global economic slowdown, during the course of last year, too delayed the fund-raising activity to some extent.

In a recent setback, the fund's CEO Ganapathy Subramaniam, who was earlier with Jumpstart Ventures, parted ways on account of personal reasons, it is understood.

So, for the time being, India Innovation Fund, headquartered in Hyderabad, will be led by Deepanwita Chattopadhyay, who is the CEO of ICICI Knowledge Park, the first wet research lab based in the city. Appointment of a full-fledged team is expected in due course.

Talking to VCCircle, Ms Chattopadhyay said, the aim of the fund is to produce over 10-15 good product-driven companies over an 8-10 year lifecycle. "There is a dearth of VC funding, government support and even debt for early-stage product companies. That is where we are stepping in to fill the gap," she says.

The fund, which has already received nearly 40 proposals, may see its first investment as early as in January. It may invest from Rs 50 lakh to up to Rs 5 crore in milestone-linked stages in each portfolio company.

The fund has roped in industry stalwarts, with wide-ranging experience, on its investment committee. They include Sharad Sharma, currently with Canaan Partners and previously head of Yahoo India R&D; Shrikumar Suryanarayan, director-general of Assocation of Biotechnology-Led Enterprises and formerly with Biocon R&D; Jai Menon, group chief technology officer at Bharti Airtel; H K Mittal, head, National Science and Technology Entrepreneurship Development Board and Dr Bala Manian, a noted Valley-based scientist and entrepreneur. The fund plans to increase the number of members in the investment committee and also induct a panel of experts for mentoring the portfolio startups.

The fund will invest in innovation-driven startup companies in sectors such as automotive technology, medical devices, biotech, intelligent transport solutions, and mass market technology applications. It will steer clear of popular segments such as back-office outfits or online classifieds firms, which have attracted much venture capital funding in India, and will look at only IP-led ventures.

NASSCOM - ICICI Knowledge Park Fund (NIIF) Anounced January 11, 2008

Mumbai, January 11, 2008: NASSCOM, the premier trade body and the "voice" of the Indian IT industry, today formally announced the NASSCOM - ICICI Knowledge Park Innovation Fund (NIIF) promoted in collaboration with ICICI Knowledge Park. The anchor investors in NIIF are Tata Consultancy Services (TCS), Bharti Airtel and ICICI Knowledge Park.

NIIF, a first of its kind initiative by NASSCOM and the ICICI Knowledge Park, has been created with the intent of providing seed stage investments in order to promote Intellectual Property driven innovations in emerging technologies. The fund will also endeavor to encourage entrepreneurship and enable innovative start-ups to reach a stage of self sustenance and growth. This fund is targeted at early stage companies with a core focus on creating Intellectual Property, and academicians, researchers and incubates looking to commercialize inventions.

NIIF will operate as a separate commercial entity with the fund corpus being created through voluntary institutional contributions from firms representing the targeted investment areas of the fund. As of now, the following sectors have been identified as the key focus areas for investment by the fund

  • Wireless technologies
  • Automotive infotronics
  • Life Sciences
  • Energy conservation technologies and devices
  • Medical devices

Speaking at the launch, Kiran Karnik, President, NASSCOM said, "The Indian IT-BPO industry has grown ten times over the last decade and is today an important driver of the India growth story. To continue this growth trajectory and attain newer heights, Indian firms, irrespective of size or nature of activity, will have to develop new competitive advantages and increasingly focus on value capture through relentless innovation. While the larger firms have the wherewithal to invest in innovation, start-ups and young firms in India (with innovative ideas) often fail to scale up due to the lack of timely availability of seed capital. This situation is further exacerbated in the context of firms who focus on IP creation in emerging technologies which often are high-risk and have long gestation periods."

"To address this serious issue of lack of seed capital, NASSCOM and ICICI Knowledge Park have decided to promote the NASSCOM-IKP Innovation fund. The fund will focus on start-ups involved in IP creation in both IT and life-sciences. It is a source of great satisfaction that India's most well known corporate brands and leading innovators in their respective industries, TCS, ICICI Knowledge Park and Bharti Airtel have decided to invest in this initiative', he added.

Mr. S. Ramadorai, MD & CEO TCS said, "As an industry leader and investor in the NASSCOM-IKP innovation fund, TCS believes this is an important national initiative required to spur IP creation in emerging technologies and build an eco-system for innovation across the country. Such funding initiatives need to take root nationally as innovation will be the key driver to sustain and enhance Indian IT's future competitiveness."

"The collaborative nature of the initiative is important because sustainable innovation requires collaboration with other stakeholders. One example of this is TCS' own Co-Innovation Network (COIN) that continues to develop a collaborative eco-system beyond the enterprise with our customers as well as venture capital funds, start-up companies and academic institutions," Mr. Ramadorai added.

Mr. N Vaghul, Chairman, ICICI Group, said "Sustaining the growth momentum of the Indian economy will require us to create new knowledge in emerging technologies. Not only does it create tremendous business opportunities for Indian industry in new areas, but the new knowledge also provides an opportunity to address some of India's most challenging problems in areas of healthcare, energy conservation etc. Creating this new knowledge will not be easy and will require perseverance and creativity especially from the young entrepreneurs. We need to ensure that impediments in the path of the young entrepreneurs are removed. The NASSCOM-ICICI Knowledge Park innovation fund addresses the key challenge of availability of seed capital and will hopefully provide a light-house effect. I am delighted to announce that the ICICI Group has decided to support this important initiative."

Dr. Jai Menon, Director - IT & Innovation, Group Chief Information & Innovation Officer, Bharti Airtel, said, "Bharti Airtel is focused on fulfilling the aspirations of millions of Indians by providing leadership to make dial tone ubiquitous. The next opportunity is for us to provide 'information tone to a billion people' - however, achieving this will entail breakthrough innovations on a vast scale. Successful innovations often happen at the intersection of neighboring industries and we expect that the convergence of IT and telecom technologies will enable us to realize our vision of taking information tone to a billion people. Creating and scaling these breakthrough innovations will require us to stimulate the Indian innovation ecosystem and collaborate extensively with other stakeholders of this ecosystem. Given our belief and passion in innovation, I am very glad to announce that Bharti Airtel will become an anchor investor in the NASSCOM-ICICI Knowledge Park innovation fund."

Dr. Nachiket Mor, President ICICI Foundation said "Technology will play a key role in addressing many if not all of India' pressing social problems in healthcare, education, unemployment, poverty alleviation etc. For these technologies and their applications to deliver results, they will need to be appropriate for the Indian context, both from the perspective of applicability and affordability. Given the magnitude of our social problems, this is not going to be easy and will require innovations on a vast scale. Therefore we need to create an ecosystem which encourages entrepreneurs to take higher risks and focus on creating game changing innovations. The NASSCOM-ICICI Knowledge Park innovation fund is an important path-breaking initiative towards enabling an Indian innovation ecosystem which encourages relevant and breakthrough innovations in frontier technologies"

The key objective of NIIF is to stimulate technology innovation through providing seed capital funding for opportunities in emerging technologies including IT, automotive, life sciences, wireless, clean energy etc. Some of the other objectives of NIIF are as follows:

  • Promote innovation in emerging technologies through patient investment
  • Encourage entrepreneurship through providing market access and mentoring
  • Enable innovative start-up companies to reach a stage where they can attract follow-on venture capital funding
  • For further information, please write to innovation-fund@nasscom.in

    About NASSCOM

    NASSCOM is the premier trade body of the IT software and services industry in India. Its focus is on ensuring the growth of the IT industry in India, on promoting the use of IT for economic and social benefit, and promoting global trade in IT.

    NASSCOM has over 1100 members, of which about 250 are global companies from US, UK, EU and APAC countries. These include the biggest Indian and foreign IT companies, as also SMEs and even start-ups. They are in the business of software development, software services, software products, consulting services, R&D services, ITeS-BPO services, e-commerce and web services, engineering services and animation and gaming. NASSCOM's member companies constitute over 95% of the Indian IT industry's revenues in India and directly employ over 1.6 million professionals.

    About ICICI Knowledge Park

    Launched by ICICI Bank Ltd. in partnership with the Government of Andhra Pradesh, the Park is committed to facilitating business-driven Research & Development.

    For further information, contact:

    Parul Gupta
    NASSCOM Press office - Text 100
    Mobile: 9999333695
    Email : parulg@text100.co.in

    Deepakshi Jha
    NASSCOM
    Phone :+ 91 11 23010199
    E-mail : deepakshi@nasscom.org