Bengaluru: Infosys has plans to allocate a quarter of its $500-million fund to invest in startups in Silicon Valley, Israel and India along with venture capital firms.
India’s second-largest software services exporter has had discussions with about two dozen VC firms, including Andreessen Horowitz, for such investments, two people familiar with Infosys’ strategy said, requesting anonymity.
“There are no formal agreements with any particular VCs. The strategy is to back startups and entrepreneurs with ideas that align with the company,” one of them said. “The idea is not just to be a passive financial investor but take disruptive solutions to customers.”
Infosys Chief Executive Vishal Sikka is seeking to broaden the company’s offerings in newer areas of technology to differentiate it from rivals such as Cognizant and Wipro amid a rapidly evolving technology landscape.
The company made its first startup investment last month, sinking about $15 million in a firm spun off from Dream-Works Animation.
Ritika Suri, who joined Infosys from SAP late last year, is leading the startup fund and mergers and acquisitions.With the Panaya acquisition, Infosys is also hoping to tap into Israel’s startup ecosystem deeper.
“Panaya offers a ready network, opportunities to hunt in what’s among the best startup clusters in the world,” the second person mentioned above said.
“Most of the investments that corporate venture arms of companies make are mostly amplifications — by definition if it is disruptive to the current business it will not. Because no BU (business unit) leader will buy something that is disruptive to their existing business,” said Sharad Sharma, co-founder of iSpirt, a thinktank body for software product startups.