Intel Capital Sees Bubble in Domestic Tech Start-Ups
Intel Capital, the investment arm of the global chip major Intel Corp, today said valuations of local tech start-ups have reached a 'bubble level' due to too much capital chasing too few quality opportunities, even as it announced USD 20 million investments in six ventures.
"I am not drawing parallels. But it feels like the 1998 dotcom bubble in the US. This is not a good sign. Most of the time, we evaluate companies and we have to leave it at that stage as we feel valuations are, too, high. But we are not getting enough good companies to invest.
"There are very few high quality deals," Intel Capital Managing Director for Asia Pacific Suresh Kumar Kuppam said here while announcing investments worth around USD 20 million in six domestic technology companies.
Also read: Intel Capital invests $20 million in six Indian companies
The companies picked up by Intel include Saankhya Labs, Testing Czars, Financial Inclusion Network and Operations (FINO), What's On India, enStage, and Duron Energy.
These investments are part of Intel Capital's ongoing efforts to support domestic technology innovation and entrepreneurship, Kuppam said.
Funds for these investments came from the USD 250 million Intel Capital India Technology Fund established in December 2005 which invests in tech companies to stimulate local innovation.
"Indian entrepreneurs are increasingly at the forefront of innovation, using technology to change the way we live and do work.
"Our investments in these six companies will help them grow their businesses and push into new markets," Intel Capital President and Executive Vice-president, Arvind Sodhani said.
Investments in Saankhya Labs, Testing Czars, and FINO have been completed, while investment agreements with the other three have been signed. However, details about company-wise investments and valuations were not disclosed.
"The computing revolution is just starting here. As PC ownership rises among the households, there is growing demand for online services and content.
"We are working closely with our Indian customers to help them meet this demand," Intel Asia Pacific Vice-president Navin Shenoy said.
Kuppam also said a new fund will be set up soon as the USD 250 million Intel Capital India Tech Fund is getting exhausted.
"We have 375 companies in our India portfolio. Once we exhaust this fund, we will definitely have a second fund," he said.
"Among the significant trends, we see initial public offerings in emerging markets, while in the developed markets, we expect mergers and acquisitions. In India, we will exit from MCX by the end of the year. But 2012 will be softer on the exit front," Kuppam said.
"I am not drawing parallels. But it feels like the 1998 dotcom bubble in the US. This is not a good sign. Most of the time, we evaluate companies and we have to leave it at that stage as we feel valuations are, too, high. But we are not getting enough good companies to invest.
"There are very few high quality deals," Intel Capital Managing Director for Asia Pacific Suresh Kumar Kuppam said here while announcing investments worth around USD 20 million in six domestic technology companies.
Also read: Intel Capital invests $20 million in six Indian companies
The companies picked up by Intel include Saankhya Labs, Testing Czars, Financial Inclusion Network and Operations (FINO), What's On India, enStage, and Duron Energy.
These investments are part of Intel Capital's ongoing efforts to support domestic technology innovation and entrepreneurship, Kuppam said.
Funds for these investments came from the USD 250 million Intel Capital India Technology Fund established in December 2005 which invests in tech companies to stimulate local innovation.
"Indian entrepreneurs are increasingly at the forefront of innovation, using technology to change the way we live and do work.
"Our investments in these six companies will help them grow their businesses and push into new markets," Intel Capital President and Executive Vice-president, Arvind Sodhani said.
Investments in Saankhya Labs, Testing Czars, and FINO have been completed, while investment agreements with the other three have been signed. However, details about company-wise investments and valuations were not disclosed.
"The computing revolution is just starting here. As PC ownership rises among the households, there is growing demand for online services and content.
"We are working closely with our Indian customers to help them meet this demand," Intel Asia Pacific Vice-president Navin Shenoy said.
Kuppam also said a new fund will be set up soon as the USD 250 million Intel Capital India Tech Fund is getting exhausted.
"We have 375 companies in our India portfolio. Once we exhaust this fund, we will definitely have a second fund," he said.
"Among the significant trends, we see initial public offerings in emerging markets, while in the developed markets, we expect mergers and acquisitions. In India, we will exit from MCX by the end of the year. But 2012 will be softer on the exit front," Kuppam said.
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