nfy's Sikka begins hunt for startups at alma mater
Some believe that since Silicon Valley is a hub for innovation, higher valuations should not stop domestic IT firms from investing.
Varun Sood
BANGALORE: Vishal Sikka has started hunting for disruptive ideas as Infosys looks to put its $100 million fund to incubate startups to work, after the senior ranks of the Bangalorebased software company held discussions at the cradle of entrepreneurship, Stanford University.
Over a three-day meeting in the second week of August, Sikka and senior Infosys executives had multiple meetings with startup founders from the Bay Area and faculty and students at Stanford, ET learns.
"I know that he has started to expose Infosys staff to the startup culture in Silicon Valley," said Gio Wiederhold, professor emeritus at Stanford. "I hope that exposure and education will work for Infosys." One manager from SAP, Sikka's earlier employer, said she wished she could have attended and shared the "purpose and passion" and now "feels the void" after Sikka quit SAP in May this year.
"More than any names (of startups), the discussion centred on essentially how a startup works and the management got a ringside view of the startup ecosystem here," said a consultant who was present at the meeting.
It is unclear if Infosys has taken a decision on which startups it will invest in but some experts believe Sikka's strategy to tap his alma mater is a good beginning for Stanford has played a crucial role in the birth of presentday Silicon Valley, with more than 40,000 companies being founded by former students and faculty of the university.
"These startups can both bring new concepts into Infosys and use services that Infosys can provide in a world where talent is scarce and that talent is hard to motivate to work on software once it is established," said Wiederhold, whose classes in the past have seen Sikka give lectures on software economics.
An email sent to Infosys remained unanswered. Indian American technology entrepreneur and academic Vivek Wadhwa said that Infosys should look at its own turf as the country has dozens of potential billion dollar companies.
"No one cares about companies such as Infosys here, the ecosystem is flooded with money and the system is rigged for the power brokers," said Wadhwa. "So their investments are likely to produce losses here. On the other hand, India is about to see an Internet boom that will make the dot-com boom here seem lame. There is massive opportunity for startups in India."
Over the last year, Infosys rival Wipro, under Rishad Premji, has already picked up equity stakes in two US-based startups, New Jersey-based data analytics firm Opera Solutions and machine-to-machine learning and Internet of things solution provider Axeda.
Nonetheless, some believe that since Silicon Valley is a hub for innovation, higher valuations should not stop domestic IT firms from investing.
"Valuation shouldn't be an issue," said Ash Kumra, entrepreneur and co-founder of DreamItAlive.com, an online community that encourages people to live out their dreams using virtual dream boards. "Instead, the current and future metrics (users) are what matter. In the long run, this will surpass the original valuation if the startup performs on its execution."
Some also think that Infosys may consider inking an agreement with Stanford under which Stanford Technology Venture may funnel potential startups that could be funded by the Bangalore-based software exporter.
"This helps Infosys (for it) does not have to go through the job of shortlisting from a whole universe of startups," said the California-based consultant.
"Stanford will certainly appreciate the $100 million participation in its ventures fund but it will not be overwhelming in the general setting of Stanford's enterprises," said Wiederhold.
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