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HSBC Private Equity invests in Newgen

Posted by Arun Uday on January 8, 2008

Announcing our first investment of 2008 (though it was actually consummated some time back). We have invested USD 7.5 million in Newgen Software Technologies Limited, a New Delhi headquartered software product company. Newgen makes Business Process Management (BPM) and imaging solutions related software and is by far the market leader in the domestic market and other emerging markets such as APAC and MEA. It is especially strong in the BFSI space and  having established a beachhead, it is now looking to aggressively expand into other markets and domains. Incidentally, both our investments so far – Trivitron and Newgen play on the theme that I have blogged about earlier about emerging markets being a good testing ground for developing disruptive technolgies. Which means that, nobody can accuse me of not putting my money where my mouth is. 😉

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Manipal Education Group Acquires MeritTrac

Posted by Arun Uday on May 29, 2007

We have successfully exited from MeritTrac, an investee company of ours. Manipal Education Group, possibly the largest education group in India, has acquired controlling stake in MeritTrac. MeritTrac provides assessment and testing services to large corporations in India primarily for recruitment purposes. It focuses on corporate clients in the IT and BPO sectors. With all major IT and BPO companies hiring in the tens of thousands each year, we had foreseen the need for a specialized player in the evaluations space to aid companies in their recruitment process. MeritTrac seemed poised to emerge as a leader in this space and kudos to the mangement team of MeritTrac for their superb execution in defining a niche and going on to own it. Exactly the kind of plan a VC would like to fund and our beliefs have definitely been rewarded. Some shared learning from MeritTrac:
a. Focus pays: Like they say, there are riches in the niches. How many times have we heard that startups should have a clear definition of what they are seeking to do rather than trying to be all things to all people.
b. Be the spade supplier: Again, an old anecdote which says that the people who make best money in a gold rush are the guys who are supplying the spades. Classic case – Cisco, which supplied all the networking equipment during the internet boom and in the process became one the largest technology companies. Many a time companies are so focused on only the mainstream that they overlook lucrative opportunities on the fringes. Remember the dot com boom when everyone was trying to be an all encompassing portal and allowed Google to walk away with the search market. (Of course, tables have turned now and search has become mainstream and e’one is now trying to outdo G there. Are we missing other such opportunities on the fringe of search?)
c. Leaders are always valuable: If you are the leader in a space, it is extremely likely that you will be valuable to someone. A leader in a $100 million space is more valuable than a laggard in a $1 billion space.

All in all, personally, it is a v.good feeling to start my VC career on such a high note.

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Introducing HSBC Private Equity

Posted by Arun Uday on April 23, 2007

HSBC Private Equity is a professionally managed group of Private Equity Funds under the HSBC umbrella. In Asia, we are currently managing two funds, headquartered in Hong Kong. Both are pan Asia funds, mostly focused on China, HK, Taiwan, S. Korea, Singapore, Asian Tigers and India. No specific geographic allocations (more opportunistic and driven by attractiveness of the opportunity). Other details as follows:
Fund 1: USD 700 million in size. Sector agnostic. Ideal deal size : $30 – 100 mn.
Fund 2: USD 120 million in size. Primarily focused on tech and related sectors. Growth or expansion stage (preferably avoid very early or seed stage). Ideal deal size : $3 – 10 mn. But, we do have a broad definition of tech. It could include companies that have a significant application of tech rather than just producers of tech.
In India, the team is headed by Rajeev Kalra, an industry veteran, who has been with HSBC PE for more than a decade now and Arun Uday, who recently joined the team and will primarily advise on technology related venture investments in India.

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