Business Interview

Mr Alok Mittal, Managing Director, Canaan Partners (India)

“NRIs have a substantial role to play”

Cannon Partners has been investing in visionary entrepreneurs and providing them networks, insights and operational guidance required to build high-performance technology and healthcare companies. For over 20 years, Canaan’s investment professionals have leveraged their deep domain expertise and extensive industry relationships to help build market leading companies. Canaan has been an early investor in some of the world’s leading companies. The company, which set up its office in India in 2006, has so far made 12 investments in the country. Talking to India Empire’s Sanjay Kaw, Canaan India’s Managing Director, Mr Alok Mittal said that NRIs have a substantial role to play in early stage ventures in the country. In start-up businesses, he said the NRIs can play a valuable role by way of mentoring and sharing their expertise
How is Canaan India doing ?
We have already invested in 12 companies in India. In the Internet and other software products, Indian entrepreneurs have become more exciting after 2006. Many firms have taken up roles in the venture capital. And the eco-system is developing very fast.

What problems you faced in India?
The venture entrepreneurship is very under-developed in India. And being in the start-up zone is not an easy job. There are restrictions on some investments. But the understanding between the banks and start-up companies is gradually improving.

What has been the role of political leadership in this context?
Our political leadership is very sensitive towards our business establishments. There are some elements which need to be enabled at a policy level. I strongly believe that venture capital is an important element.

You are from IIT Delhi. How did your education help you in your venture in India?
Coming from IIT gives you a calling card. It also gives you credibility and networks. It really helps.

What is your take on IT boom?
The Information Technology boom is like waves. The first wave was in 1987. Now, the IT companies are growing strongly. There has been a lot of internet space in our mobiles during the past 3 or 4 years. The domestic consumption of both internet and mobiles has grown. The core issue is that IT adoption waves are critical to our business.

As far as the IT sector is concerned, where does India stand?
If we compare our IT sector with the developed markets, we are still at a very early stage. Look at China. It is far ahead of us. Being early in any cycle has its own challenges and merits. It is also exciting to be too early in any chain as it gives you space for creativity and market growth. And India has a high growth in technology market.

Who are your main competitors?
There are about a dozen of early stage fund providers. At times, we do have to compete with them. But there are occasions where we end up working together. There are no monopolistic players who capture the markets.

How are Indian markets shaping?
The investor confidence is very low. And it’s too early a market for venture capital.

Your take on the Indian economy?
We have invested a lot in educating entrepreneurs. As far as economy is concerned, answers change with the passage of time. Given the global issues, one could have a benign attitude. There are systematic risks in Europe. Just two years ago, the picture looked good…On micro basis, emerging markets are bound to grow. But political certainty is necessary to drive growth.

What role you see NRIs playing in shaping our economy?
In all early stage ventures, NRIs have a substantial role to play. They can play a valuable role by mentoring entrepreneurs and sharing their expertise.

Back to Canaan. What are your CSR initiatives?
We are contributing in developing eco-systems, but not in terms of charity. In our mind, entrepreneurship is a big engine of change. That’s why we actively participate in The Indus Entrepreneurship (TiE) events. Tie has been central in mentoring entrepreneurship. There are some other organizations as well working in this direction.

TiE is organizing the Internet Day on May 23. Tell us more about it…
The Internet Day is poised to be one of India’s most exciting gathering of the global internet community. It will provide a platform for global internet players to come together and create present value, while defining future opportunities. The Mobile Master’s and others related to the internet space can network with the most relevant people in the domain..

May 2012

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