Search the Internet          Tips  Sites: Finance, Investment

Venture capital industry will boom again in India: Kanwal Rekhi

Sumeet Chatterjee in New Delhi

Venture capitalist Kanwal Rekhi says the 'allure' of India 'is not going to vanish just because of some short-term downturn in the industry'. "The (current) technology meltdown will probably continue for one more year. I don't think this will disturb the real entrepreneurs much. Real entrepreneurs will thrive in this environment," Rekhi said in an interview during a visit to New Delhi.

With a personal worth of around $500 million, Rekhi, 56, isn't particularly rich by Silicon Valley standards, but he makes the money go a long way. And after three decades of phenomenal success in the land of opportunity, the evangelist is back home, preaching his mantra for creating massive wealth.

Rekhi, a graduate of the Indian Institute of Technology, Bombay, is also the president of The IndUS Entrepreneurs, a non-profit global network of entrepreneurs and professionals that has often been termed the "Indian Mafia".

Ask him about the state of the venture capital industry after the dot-com crash and the man doesn't look a wee-bit ruffled. Not surprising for someone who is a legend in Silicon Valley for his generosity as an angel investor.

"The venture capital industry is run by the smartest entrepreneurs in the world. They are now soul-searching as to why they were so stupid and lost so much money in dotcoms," Rekhi said.

"In India, it was only last year that venture capital started flowing in and I had said then you have problems in India. You have inexperienced venture companies, inexperienced entrepreneurs and inexperienced environment...don't expect miracles."

Rekhi, however, is optimistic that the dotcom debacle would not wipe out venture capital activity from the information technology industry and that funds would start flowing in by the end of the year.

"The venture capitalists lost their money for sure but they have now become more seasoned. They know what not to do. Loosing money is part of the game. Money will come. Venture capitalists do not give up easily. They are very persistent people," Rekhi said.

In 1982, Rekhi, a successful businessman in his own right, co-founded a networking company, Excelan. He became its CEO in 1985. Excelan went public in 1987 and merged with networking major Novell in 1989. Rekhi then became the first Indian to serve on the board of a multinational infotech company.

Named Entrepreneur of the Year in 1987 by the Arthur-Young Venture magazine, he also serves on the boards of several software companies.

In recent years, Rekhi has become the dominant investor among Silicon Valley's affluent Indian community. He has funded 12 small companies such as Exodus Communications, Vision Software Tools, Cybermedia and Ambit Design -- all started by Indian Americans -- in the past three years.

Looking ahead, Rekhi says the "second generation" of venture capitalists will now focus on companies developing new technologies and products for the global marketplace.

"Last year they invested in dot-coms. They are not going to invest in dot-coms any more. IT enabled services doesn't need venture funds. So, funds will basically come in the product development segment."

"Currently lot of product development is being done in India as back office operations for foreign companies such as Microsoft and Oracle. Some entrepreneur will have to put it together. Venture capitalists will definitely support it. It's just a matter of time," he said.

Indo-Asian News Service

Money
Business News

Tell us what you think of this report