Technology, Venture Capital, Private Equity

Perspectives from an Indian VC

Archive for April, 2008

Congratulations to UTI Ventures

Posted by Arun Uday on April 24, 2008

One of the factors holding back entrepreneurial activity in India has been the lack of enough motivational success stories. An important turning point in the history of PE investing in India was the stupendous success of the Bharti Telecom investment by Warburg Pincus. The multiple times return on capital they earned made other foreign investors wake up and take note of the opportunity here. Similar stories are required in the VC world to rev up entrepreneurial and VC activity in our country. One of the common complaints we hear is the lack of early stage funding in India, though thats changed a lot in recent past with multiple seed and early stage funds coming in. Success breeds success, and in a myriad ways. Lack of enough hi-tech entrepreneuiral successes where startup employees have taken home large sums by way of stock options has also been a deterrant for others to sign up for startups. Hence, a handful of big successes is all that is required to seed the ecosystem of investors, entrepreneurs and also other contributors (read tech staff) to come together to start building great cos.
Therefore, this news item on  UTI’s blockbuster exit from Excelsoft augurs well for investors and entrepreneurs alike. Congrats to the UTI team!

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Stagflation may actually benefit the US

Posted by Arun Uday on April 2, 2008

Amidst all the gloomy news coming out from the US economy, the one silver lining has been the uptick that its exports have been demonstrating for the past few weeks. This is mainly attributable to the plunge in the dollar against most world currencies, rendering exports more competitive. Given the recency of this phenomenon, its hard to predict if this is a trend or a mere blip. But, given the fact that the Fed has been working the currency printing presses overtime, the dollar’s value is certainly not heading back north any time soon. On the other hand, rising commodity prices, coupled with the reduction in purchasing power of the dollar is also causing inflation to rise to uncomfortable levels. And with GDP growth also dramatically slowing down, we have the makings of a classic “stagflation”, believed to be a nightmare for central banks for the following reason. Read the rest of this entry »

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