There are a couple of evergreen questions in the Indian startup eco-system. What’s going on in the ecommerce industry? And is Bangalore the Silicon Valley of India? Are we there yet? We got talking to Pradeep Tagare, the Director of Intel Capital in India on these. Tagare has spent over 15 years in the Silicon Valley as a top executive and an entrepreneur. He founded Yopa, a mobile middle ware software company which was acquired by AOL. Six years ago, he returned to India and joined Intel capital. In an interview with NextBigWhat, Tagare shares his thoughts on the questions. Edited Excerpts.
What differences do you notice between the Valley and India’s startup hubs?
The biggest difference is that the bay area is driven by innovation, new ideas, business models. Whereas in India, its really executing a business model rather than innovation. Given the nascent nature of the industry its not surprising.
The second is that the valley is driven by a strong M&A (mergers and acquisitions) culture where startups get acquired. There is a whole lot of such activities that go on. That pulls more people into the ecosystem. In the tech space in India, its almost non existent.
The major reason is the way tech has evolved. Schooling, society and perception of success or failure has also got to do a lot with it. But its changing.
Intel Capital has invested in a few Indian e-commerce companies. How is the industry shaping up?
These companies are going to keep growing, probably slower than what they used to. But the best thing is that consumers have caught on to it. It has gone beyond the phase where people are slowly moving away from the lure of discount and are looking for convenience. It will take a few years but user acceptance will keep increasing.
What will be the exits like in the space?
Exits there will be some big M&A within the ecommerce space. There is enough of global large e-commerce companies that are interested. As regulations ease out, it would make sense for at least a couple of large acquisitions in the space.
What about IPOs?
IPOs are a long way out. At least on the Indian exchanges its going to be a while. They have to get to those numbers first. But some companies might be able to pull off a foreign listing like MakeMytrip. For big M&A, regulations have to change.
What do you look at in very early stage companies?
We can look at very early stage companies. For instance, when we invested in Global Talent Track, the company had not even registered. But the bar for that is really really high. That company has to have something really differentiated. The pedigree of the founder, the product or technology being developed or imagined has to be really different.
What kind of companies does Intel capital like?
We like to look at investments around Internet, mobile, IT or ITeS products and areas like education and healthcare. Cloud computing and data center technologies are also of great interest to us. Cloud services including software as a service, basic cloud platform as a service are exciting. We see a fair amount of activity there. Over the next few years, it will grow significantly and that’s an area we will be tracking.
On the consumer front?
As the 4G ecosystem evolves, we expect a whole new generation of companies. I’m not sure if we are going to see radically new services but just the fact that we have lot of people who have access to the net, things that were a struggle till now will become a lot easier. You may not see a whole new set of services, but better and faster services.