'Start-up investment opportunities are better in China'

Starting in late 1998, Intel Capital has invested in 40 companies in India
including Sasken, which has come out with an IPO. Though India remains a key
focus market for the company, Intel has not been investing much in creating
intellectual property or fabricating units here. The company started its
operations in India more as a back-office service center and increased its
presence to investments in start-ups and other companies including listed
companies to pursue common goals. Intel Capital's president Arvind Sodhani
spoke to Anurag Prasad of CyberMedia about their India plans and why services
market is strong here.

India has seen more investment flowing into services than into creation of
intellectual property. What is your strategy?

India has a better entrepreneurial environment than many other countries.
There is a lot of scope in software, research and design. We have been looking
at companies in the wireless and mobility space. India can be the leader in the
next-generation wireless technologies like 4G. The companies here have skill
sets to develop the entire software stack for various products, unlike in other
countries where one company might excel in doing a particular job.

Arvind Sodhani

Intel Capital is focused on developing the local markets. We are investing in
companies that are capable of fulfilling local needs and demands. We have been
targeting investment in software services and system companies. It is true that
in India investment has been more towards services but our R&D center in
Bangalore shows our commitment in creating intellectual property from India.
Each country offers unique opportunity. China is good on manufacturing; Israel
has developed a niche in raw technology; and India is good on services. India
has a huge market and it is matter of time before it creates intellectual
property and comes out with next-generation devices. There is no dearth of
talent and we have plans to tap this also. We strongly believe in open standards
and how it can be promoted. We aim to influence how a particular technology gets
developed. We invest in companies like Sasken that feed large communication
companies with their technology.

The Indian market is said to be difficult for venture capitalists when it
comes to exiting. How has been the experience for Intel Capital?

For Intel, the Indian market is not different from others. Today no market
can develop in isolation. It has to be part of the global trend. Companies go
public when they feel the need and see the right opportunity, like Sasken.
Others look for mergers and acquisitions. Out Indian portfolio has done
reasonably well. Intel is a patient and long-term investor and we are committed
to India. But if you compare with countries like China, we have been there for
20 years now and India is comparatively new.

So when can we expect an India fund from Intel similar to the China
technology fund?

Our commitment to different geographies depends on various parameters. We
seek appropriate the time to increase involvement in that country. There have to
be the right dynamics. China has more investment opportunities and the ability
of start-ups is greater there. This does not mean India is less strategic or
important for us than China. In fact, there is no comparison between the two
countries. The focus areas are different and both countries have their own
advantages. China has excelled in manufacturing and design for IT-related
products while India has been strong on the software side. As of now we are not
looking at setting up an India fund. However, the possibility of a separate fund
cannot be ruled out.

What are your investment plans for India?

Intel is a broad-based investor. We look at ourselves as a strategic
investor to help a company. Currently, out focus is on mobility, digital home,
digital health and entertainment, and technology manufacturing. Our investment
opportunities are weighed on the merit of the projects. We would invest in
building cellular ecosystems, cellular platforms, and robust mobile devices. The
future would be for radio frequency, analog subsystems, and multimode-capable
devices. Next-generation power supply is also an area we are looking at.