India: Wipro’s venture arm deploys $65m across 18 startups in three years

Wipro
Photo: Hemant Mishra/Mint

Wipro Ventures has deployed $65 million, or two-thirds of its corpus, in 18 startups since it was set up in 2015 and has helped its parent, Wipro Ltd, win more than 100 deals, underscoring the early success of the software services company in tapping into the disruptive startup ecosystem.

Of its total investments, 14 are in the US, three in Israel and one in India—in Pune-based big data start-up Altizon Systems Pvt. Ltd.

“As of date, we have committed more than $65 million in capital,” said Venu Pemmaraju, a managing partner at Wipro Ventures.

Both Pemmaraju, formerly a senior investment manager at Intel Capital, and the other managing partner, Biplab Adhya, are based out of California. They report to Rishad Premji, the elder son of billionaire, philanthropist and Wipro chairman Azim Premji.

“Since 2015, we have had more than 100 wins in conjunction with the startups we have invested in,” said Adhya.

Wipro Ventures’ investments have allowed Wipro to offer new-age technology solutions in engagements with some of the firm’s 1,132 customers, and win contracts, highlighting how large information technology (IT) companies are keeping pace with the latest technologies.

In the last few years, Wipro’s revenue growth has lagged its larger rivals, including Tata Consultancy Services Ltd and Infosys Ltd. At the end of the June quarter, HCL Technologies Ltd edged past Wipro to become India’s third-largest IT firm.

Wipro Ventures’ performance, however, has been one of the few bright spots in the Wipro story.

Infosys, which also set up a $500 million corporate venture arm, Infosys Innovation Fund, in 2015, has invested in only eight startups so far. Infosys divested its stake in ANSR Consulting Holdings Inc. in December 2017.

Rishad Premji, who is Wipro’s chief strategy officer and director, also oversees the company’s mergers and acquisitions.

Over the last four years, Wipro has been second only to Noida-based HCL in acquisitions, having spent $1.17 billion in acquiring six companies including Denmark-based design firm Designit and US-based cloud computing firm Appirio Inc.

Understandably, many analysts maintain that Wipro has done a better job at mergers and acquisitions and investments than its peers, including Infosys.

“Wipro has done a better job of M&A than most IT services firms to date,” said Ray Wang, founder of Constellation Research, a technology research and advisory firm.

“We measure both the financial health of the companies and the strategic value to Wipro and the startups. Our baseline investment strategy is still the same—invest into early- to mid-stage enterprise software companies that have exhibited initial product-market fit, deployed their solution at a handful of enterprise customers and put mechanisms in place to engage with a global technology services provider,” said Pemmaraju.

“That said, each deal is different and one size doesn’t fit all. So we do modify our evaluation criteria accordingly,” said Adhya.

This article was first published on livemint.com