Infosys Boosts Startup Fund 5 Times to $500M. IoT, AI, Automation In Focus
Infosys has expanded their startup fund from $100 million to $500 million, an increase of 5 times, to help and nurture Indian startups and take them into the next level. Observed from another angle, some technologists are claiming that Infosys is now looking for major acquisitions of Indian start-ups, as it is now ramping up their product portfolio, and wants to diversify from their core services offering.
CEO Vishal Sikka has made his intentions pretty clear during Infosys’s third quarter earnings announcement, as he said, “We are going to see more traction in the acquisition space.. We are not interested in buying yesterday’s technologies but augmenting our capabilities in innovation, automation, artificial intelligence, better productivity, collaboration design and things like this,” adding later that they are working on 10 new projects involving Artificial Intelligence.
Highlighting that this war chest of over Rs 3000 crore, dedicated for startup funding and acquisitions would be invested in Indian startups, he said, “I want to dedicate a part of the funds for innovation coming from Indian start-ups.. We can bring them to scale, invest in them and help them to expand their abilities.”
Are Acquisitions Major Focus?
Infosys has assigned Deepak Padki to head this startup fund, as he has been appointed as Head of Corporate Strategy. His main task would be to engage and initiate dialogues with startup founders, and to create viable business deals with them.
Earlier, Deepak was heading Infosys’s Mergers and Acquisitions team, which gives boost to the theory that in coming days, Infosys can announce some acquisitions and mergers news with new, upcoming Indian startups specializing in next-gen technology such as Internet of Things, Artificial Intelligence and Automation.
Infosys Startup Funds Is Unfortunately Underutilized
Way back in April, 2013, Infosys devised a special startup fund amounting to $100 million (Rs 600 crore) to invest in products, platforms and solution ideas. The fund was conceptualized under then CEO S.D Shibulal. But then after Vishal Sikka took over the mantle of the company, the funds have been lying idle, without much activity related to startups or fundings.
The last major investment which Infosys made was in 2012, when it acquired Zurich-based consulting firm Lodestone. Besides that, Infosys has partnered with video technology startup Ooyala and communication tools provider Clique Intelligence, both of which are US based companies.
If we read Vishal Sikka’s replies during a press conference which happened in October, 2014, we will find that Infosys has made some interesting plans regarding start-ups and innovation. And fortunately, these thoughts are not concerning services industry, which had been Infosys’s major source of earning.
India is right now at a threshold of startup boom, as we are world’s 3rd fastest growing startup eco-system. With 3100 startups, India is closely behind UK with 4000 startups and catching up to US which has 41500 startups. Collectively, Indian startups have received venture funds worth $2.3 billion since 2010, and by 2020, Nasscom has estimated that India will be home to 2000 tech startups.
It seems that Infosys is now geared towards creating the next big product company from India, and the first step of 2015 has already been taken.