August 6, 2006
Helion launches a bellwether for how to do venture capital
Two years ago, when most venture capitalists thought about opening
an office in India, they hopped on a plane and hoped for the best.
Later, when VCs mulled opening offices in Bangalore, they would
hope their limited partners wouldn’t become alienated by the
new exposure to foreign investments.
All that’s changing. Nowadays, partnering is increasingly
popular, and the close relationship between the newly minted Helion
Venture Partners fund and Silicon Valley’s Woodside Fund is
instructive (see Helion
Raises $140M for India).
Helion, which announced Thursday it had put together a $140-million
venture fund focused on emerging technology businesses in India,
was founded by Ashish Gupta, a former venture partner at Woodside,
which is based in Redwood Shores, California.
That close relationship that Mr. Gupta developed with Woodside
during his tenure there will serve both firms well. In effect, Helion
will also act informally as Woodside’s partner in forthcoming
deals on the subcontinent by allowing Mr. Gupta to look at deals
“in country” and know that he could syndicate deals
between Helion and Woodside down the road. Woodside, in turn, gets
a trusted partner with Silicon Valley experience, and deep knowledge
of how Woodside looks at deals.
Hand in Glove
At the moment, the relationship between the two firms is
hand in glove. All of Woodside’s partners have backed Helion
as limited partners, using their personal wealth, supplemented by
a number of as-yet unidentified Ivy League university endowment
Dan Ahn, managing director at Woodside, said he had a high level
of confidence in the team, having worked alongside with Mr. Gupta.
“We’re going to maintain a close relationship. The
plan is to look for ways to cooperate, in ways we can add value
beyond money,” he said.
Would they consider co-investing with Helion? “Absolutely,
without a doubt,” Mr. Ahn said. “Ashish is a great guy,
and we were not ready to open an office there, because we’re
known as a Bay Area, Silicon Valley-focused fund. But we felt he
had the right strategy to do a fund there, and it made sense for
him to start a separate fund that we can offer help and support
to in different ways.”
Helion is just the latest fund to open its doors in India. Venture
capital in Western Europe, Asia, and the United States is flowing
into the region, attracted by low-cost locations, and the opportunity
for big exits.
“Helion is going to be looking at technology-enabled service
companies, which are not capital intensive, and they don’t
need lots of equipment. For the dollar, you can get twice the number
of companies started,” said Mr. Ahn. “From there you
can move from normal venture ownership of around 20 percent to get
a larger portion of the company.”
The fund’s investing strategy will be stage-agnostic, and
to some degree technology-agnostic. In a statement, Helion said
it intends to invest both in companies that create technology products
and services, as well as nontechnology businesses that leverage
Though it has two offices in India—one in Bangalore, the other
in Gurgaon—Helion, like many VCs operating in India, is incorporated
for tax reasons on the tiny island of Mauritius, located in the
Indian Ocean off the east coast of Madagascar.
Until recently, Mauritius was best known as the place where the
dodo bird became extinct. VCs active in India know it better as
the Cayman Islands of Indian Ocean. Owing to treaties with India,
a headquarters in Mauritius allows a firm to avoid getting taxed
twice, and is otherwise a useful vehicle for U.S. venture firms
to invest in Indian companies.
Island location aside, Mr. Ahn said the new fund has an immense
opportunity before it.
Other VCs that operate in India are very generous in their praise
of the Helion team,” he said. “My personal opinion:
I think it has the opportunity to be the leading venture firm in
India, and I say that with a straight face.”