Start-ups drive innovation: K Ganesh

Growing start-up ecosystem in India has encouraged corporate giants to establish their own venture arm with the intention to invest in start-ups. Fundamentally, the venture arm of any organisation also plays the role of an incubation model which provides all the resources required to set up a venture.

In an interaction with Entrepreneur India, K Ganesh, Chairman and Co-founder, Portea Medical highlights more about the benefits of raising funds from a corporate venture fund:

In India, how corporate giants are creating a separate venture arm in a bid to invest in start-ups?

With start-ups blooming in India, lot of interest is seen among corporates to venture into funding. In the middle of the last decade, there was a lull, but now, corporate venture funds are becoming active again. Corporates have venture capital firms to fund or invest in start-ups because they believe that innovation doesn’t always come from R&D activities, but it comes from start-up companies and smaller projects.

Tell us more about your partnership with Qualcomm Ventures?

Qualcomm Ventures, a San Diego-based venture capital firm, has recently invested an undisclosed amount into Portea Medical. We are happy to partner with Qualcomm. It’s not only about capital, but added-value of exposure to other technologies that Qualcomm has. It is something more than just financial help.

What is the present scenario in India in terms of start-ups seeking funds from corporate ventures?

From a start-up perspective, seed funding is done by a financial investor. Corporates take up co-investing. Corporate venture capitalists like to invest along with other financial venture capitalists. In case of Portea Medical, Accel Partners and Qualcomm had put in money initially and corporate venture capitalists asked for a board seat.

What are the key differences between venture capitalists model and corporate venture capitalists model?

Venture capitalists raise funds from their investors, whereas corporate venture capitalists raise funds from their own balance sheet. Venture capitalists have a funding duration of 7-8 years, whereas corporate venture capitalists do not have any time limitation. Venture capitalists can invest in many sectors, but corporate venture capitalists invest only after establishing a strategic connection.

What are the benefits that start-ups can enjoy from a corporate venture capitalist?

The crucial benefits are connection, networking and latest development in business.

What would be the criteria or norms that a corporate venture capitalist looks for before investing in start-ups?

The criteria or norms that a corporate venture capital looks for before investing into start-ups are quality of the entrepreneur, situation of the market, possibility of creating a large and developing a valuable company.

How do you see the future of corporate venture capitalists in India?

With increasing interest in start-up ecosystem of India, there are good opportunities expected to come. Indian start-ups also see a lot of opportunities in terms of technology, value addition, etc.