Intel Capital targets product-focused startups in India
Intel Capital plans to use the remainder of its India Technology Fund to finance product startups that facilitate the adoption of chips for smartphones and tablet computers manufactured by its parent company. The corporate VC unit is particularly keen on the education sector.
"If somebody can come up with an innovative tablet, with an innovative interface - after all, we are a country of many languages - that would be of great interest," Sudheer Kuppam, Intel Capital managing director for India, Japan, Australia, New Zealand and Southeast Asia, told LiveMint.
The Indian government has introduced a low-cost tablet computer line for students, known as Aakash, with each unit priced below $35. Industry participants argue that there is space in the market for superior devices targeting the same user base.
Intel Capital primarily invests out of its global fund but launched vehicles specific to China and India in 2005. The India Technology Fund has a corpus of $250 million and one fifth has yet to be invested.
Kuppam said a record $56 million was committed in 2011 to 17 companies. Of these, only two are product companies - semiconductor manufacturer Saankhya Labs and off-grid power specialist Duron Energy - and the rest are service-oriented. Saankhya and Duron were among six firms that received $20 million between them last September.
More product companies are likely to be targeted when design and R&D expertise reaches critical mass in India. The focus on product startups fits in with Intel Capital's priorities for 2012 on a global level - ultrabooks, smartphones, tablets, and services around cloud and security.
It was reported in October that Intel Capital is looking to raise $250 million for a second India-focused fund.
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