Infosys, one of India’s biggest IT service providers, has had a happening year in terms of investments. The last seven days has seen the IT giant investing in two US-based tech startups for a total of $7 million, bringing the total number of investments this year to six. Curiously, five of those are US-based.
Both investments that happened in December were in tech-based platforms: $4 million in cloud migration and disaster recovery software firm Cloud Endure, and $3 million in Whoop, a startup offering wearable and performance-enhancing systems for athletes.
A few days ago, Infosys–along with Amazon Web Services, YC Research and others–also pledged $1 billion for the non-profit artificial intelligence research company OpenAI. Infosys CEO Vishal Sikka is among its advisors.
The IT giant has made a strong move in the direction of investments after Vishal, former member of SAP AG executive board, took over as CEO and MD in July 2014, making headlines for being the first non-founder to head the 34-year old company.
His entry was followed by an announcement of Infosys Innovation in India Fund with a fund size of $100 million. By early 2015, the fund was expanded to $500 million. The company website says: “Infosys aims to harness the entrepreneurial spirit in India to provision young companies that develop innovative technologies on automation, Internet of Things (IoT), and artificial intelligence. Startups that receive the funding will also be inducted into the global ecosystem of strategic partners that Infosys is building.”
By April, Infosys had acquired a minority stake in Airviz Speck, an affordable, personal air quality monitoring startup for $2 million.
In July, it was the Bengaluru-based corporate consultancy firm called ANSR Consulting–the parent company of Kryon startup accelerator in Bengaluru–that attracted a minority stake of $1.4 million from Infosys.
Unlike its competitor Wipro that does not partner with venture funds, Infosys partnered with Vertex Ventures in September (for an undisclosed amount). Wipro had announced $100 million for investment earlier this year, and has made four investments so far. In October, Infosys announced a $70 million investment in Noah Consulting, a Houston-based managing consultancy for oil and gas industry. It is also rumoured to invest in the Silicon Valley-based venture capital firm 500 Startups.
Infosys and Wipro are not the only two multi-billion-dollar companies that are interested in startups. Tech Mahindra had announced $50 million as corporate venture capital fund in partnership with SBI Holdings, Japan. Although Cognizant Technology Services offers no funds, it habitually engages with startups too.
Indian MNCs opening up to boosting the growth of innovative startups is definitely a welcome move. However, it is yet to be seen how these startups will utilise their skills for the benefit of these MNCs and their home offices. More importantly, young entrepreneurs in India are hoping that these MNCs pay more attention to them. Titled ‘Innovate in India Fund’, Infosys' fund so far does not seem to have taken the 'India' part seriously.