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Corporate May 5, 2012

Indian tech enterprise is thriving; LinkedIn told us why

By Sourav Majumdar

Naren Gupta, Silicon Valley entrepreneur and founder of leading venture capital firm Nexus Venture Partners, believes some of the greatest technology companies of the future will come out of India. Gupta should know, having helped some Indian ventures scale up and sell out to some of the largest names in the world.

Gupta, whose firm was instrumental in the sale of Hitesh Chellani and Anand Babu Periasamy-founded open source storage solutions company Gluster to Red Hat for $136 million in late 2011, says Indian enterprise is particularly active in the technology space, and the capability to build companies of global scale exists.

Friday's announcement that global networking site LinkedIn has bought the world's largest slide sharing site SlideShare for a hefty $119 million (Rs 640 crore) is another example of how Indian entrepreneurs are powering some of the biggest global enteprises. SlideShare was started by Rashmi Sinha and her brother Amit Ranjan, who hail from Allahabad.

A LinkedIn property. Image courtesy SlideShare

The move by LinkedIn to pick up SlideShare is strategically significant, since presentations-which are SlideShare's business-help connect professionals with several others globally who are in interested in the sector or are in similar lines of business and therefore fits like a glove with LinkedIn's business objectives. In fact, the SlideShare deal is part of a long list of companies which have been founded by technology entrepreneurs of Indian origin and then acquired by global powerhouses.

The Economic Times of 5 May quotes similar deals like the Tagtile one only last month, where Facebook acquired the company which was set up by two IIT graduates. The paper also cites the example of the Junglee sale to Amazon in 1998 and the acquisition by Wal-Mart of data analytics firm Kosmix set up by the same tech entrepreneurs.

Says Gupta: "If you look at Silicon Valley, the number of startups with Indian founders, the number of companies like Intel where half the engineers are of Indian origin...I think it's a very unique situation for India."

The SlideShare-LinkedIn deal will doubtless inspire several other tech entrepreneurs working on various business models - internet-based or otherwise - to consider scaling up their firms and then looking at exiting once they are on the radar of global giants. As global internet and tech giants aim at expanding their footprint and enter related areas, analysts say there will be more cases where they will want a foothold in related areas and will look at the acquisitions route to reduce the time taken to reach the next level of growth.

SlideShare has nearly 7.4 million presentations hosted on it, and therefore is a good fit for a site like LinkedIn. It has nearly 16 million registered users. Of late, Indian tech entrepreneus-particularly those in the e-commerce space-have been scaling up, even as global giants come calling. In order to acquire greater scale, e-tailing company Flipkart recently acquired Letsbuy in a well-hyped deal, signalling consolidation in a market which, several venture funds and private equity players say, is getting a bit too crowded for comfort. The Flipkart deal comes just as Amazon has entered India via Junglee.

In many cases, some of these entrepreneurs will be in a position to sell out to global giants who want a firmer foothold in the growing Indian market, particularly in consumer-facing technology businesses.

(The writer is Editor-in-Chief of Entrepreneur magazine)

by Sourav Majumdar

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