VC Helion Leading Woodside Fund's Way To India
By Michelle Tsai and Marine Cole
February 28, 2006
For Woodside Fund, the risks of investing in India went way down
when it joined with Helion Venture Partners, a new $120 million
India fund started by Woodside Venture Partner Ashish Gupta, for
deals in the subcontinent.
Direct investments would be a natural next step for Redwood Shores,
Calif.-based Woodside, which already has 80% of its portfolio companies
with offshore arms or sales in India, said Managing Director John
Occhipinti. Though the venture firm will co-invest with Helion,
said Gupta, Woodside's immediate goal is to help portfolio companies
lower development costs and increase sales in Asia.
"We're really excited about early-stage opportunities in India,"
said Occhipinti. "Over the next five to 10 years, there will
definitely be tremendous innovation. It's very important to continue
to watch those markets."
Woodside's partners are personally investing in Helion and are
introducing Helion to Woodside's limited partners. But the venture
firm's structure precludes investment in another venture fund.
Unlike Woodside, few Silicon Valley VCs have formalized relations
with India funds, but they're already placing bets. Kleiner Perkins,
Sequoia, and New Enterprise Associates have made investments, and
Bessemer, Battery, Norwest, Canaan Partners, Draper Fisher Jurvetson
and others have made moves to establish a local presence.
India has been attracting investors for years with its IT outsourcing
services, but this time VCs are eyeing the growing middle class.
The burgeoning wealth among consumers has given a boost to Web businesses
and mobile services, and the trend is expected to grow stronger.
Indeed, Kleiner, Norwest and WestBridge Capital Partners, a longtime
investor in India, all recently funded online travel companies in
Steering Woodside through the new venture topography is Gupta,
whose angel investments in India include Daksh, a customer services
company acquired in 2004 by International Business Machines Corp.
Gupta is based in Los Altos, Calif. Kanwal Singh, a former Carlyle
Group principal and previously Intel Corp.'s head of marketing for
South Asia, and Rahul Chandra, formerly of Walden International,
will round out Helion's team in Bangalore.
"There are enough companies being created in India that the
deals we're seeing are very compelling," said Gupta, who spends
much of his time traveling between the two continents. "But
there's not enough early stage money on the ground in India. Having
people who have operational backgrounds would fill a gap in the
Helion, which began raising capital in mid-2005, expects to close
its fund by early summer, said Gupta. The new firm plans to make
its first investment within the month, however, as limited partners
have agreed to contribute capital on a deal-by-deal basis in the
meantime. In addition to targeting traditional limited partners
for its fund, Helion is also in talks with other U.S. VCs for potential
Teaming up with a local partner like Helion cuts the risks of an
emerging market that has a short history of venture investments
- albeit a market that is shaping up to be one of the next hotbeds
of technology innovation and consumption.
No longer just a center for outsourcing, India is transforming
itself into a creator of technology with Bangalore as its Silicon
Valley. "Now it's turning into front-line development,"