India

Microsoft equity stake in Indian payment company

2008-03-07T11:57:51Z

About a month back, we took an equity investment in Oxigen Services (India) Pvt. Ltd. The announcement was an acknowledgment of the integral role of mobile telephony and mobile payments under our Unlimited Potential strategy. Some may recall we profiled Oxigen back in October at i3 2007.

As the first such deal in India, the investment generated many questions amongst our entrepreneur and investor friends here in India. To answer these questions for a broader audience, I sat down with my colleague, Latif Nathani, who is the general manager for Microsoft India’s Unlimited Potential Group for his views as one of the individuals who led the investment. A serial entrepreneur himself, Latif carries the ambitious charter of helping to make technology relevant to the over 700 million people in India who sit at the middle and bottom of the economic pyramid.

Before we dive into the detail, let me explain a bit about Oxigen. Headquartered in Gurgaon, Oxigen is a leader in the mobile payments platform. It currently has a footprint of 50k POS terminals across India and conducts over 7m transactions per month. Oxigen handles aggregation of recharge, bill payments & subscriptions, for all leading Telecom operators, Internet Service providers, Direct to Home TV, PrePaid Radio, PrePaid Value added Services, Railway and Airline ticketing etc on a single platform. It has a plethora of other services in its pipeline like utility services, insurance, travel, cinema, gaming, applications and content that would be launched shortly on its web and mobile solution.

In short according to their site, Oxigen is an IT enabled transaction and payment processing platform for electronic delivery of prepaid and transaction/payment management services in a seamlessly networked environment through a rapidly expanding retail network.

Now for the Q&A with Latif…

What is the Unlimited Potential Group (UPG)?

UPG is Microsoft's efforts to bridge the digital divide profitably. The global Unlimited Potential initiative is intended to reach billions of people at the lower end of the economic pyramid in a profitable and sustainable fashion – of which India plays an obviously important role. The focus areas for UPG in India are affordable computing, education, shared access, and mobile / mobile payments.

Although we have done so in the past, Microsoft doesn't typically pick up a minority interest in companies. What made Oxigen different?

Two things. First, there was a commercial agreement that preceded the investment. Second, we felt helping Oxigen expand their presence across India would be beneficial to our vision of bringing affordable technology to people across India. Oxigen is in 50k outlets today and perform 7m transactions a month. Providing growth capital allowed Oxigen to expand at a much faster rate.

Through our efforts to foster Local Software Economies across the globe, we often introduce high potential startups to venture capitalists to help them grow their business. Why use Microsoft’s money instead of connecting them to one of our VC partners?

Just to clarify, our investment doesn’t prevent others from making investments. We specifically wanted to help Oxigen grow their footprint across India and in this case we felt it made sense to use our capital for this purpose. We had already invested in an affiliated company in South Africa and viewed this deal as an extension of the existing commercial agreement we had with Oxigen.

Why didn’t Microsoft buy Oxigen entirely?

Technical and legal details aside, Oxigen is an enabler to our Microsoft and Microsoft is an enabler for Oxigen – but we’re fundamentally in different businesses. Running a mobile payments company is not core to what we do – but we do see Microsoft’s software and services as a key enabler for their business going forward.

How will Microsoft benefit from this partnership?

As their customers start using the internet on mobile phones, there is the opportunity to incorporate our Live services email. There are significant advertising opportunities.

How will Oxigen benefit?

Growth capital to expand operations and Microsoft’s underlying software and services technology will provide significant benefits to Oxigen.

Is UPG looking for similar deals to invest in?

We’re always looking for partners to reach the masses and will consider similar deals in the future but, as you know, Microsoft doesn’t have a venture arm and does not typically consider early stage equity investments.

Paul Murphy, Microsoft India

Indian Startups Continued...

2007-10-31T05:12:00Z

We received a strong response from the first 10 or so profiled startups, that we've profiled another 15 startups from India that are very much worth taking a look at:

Coruscant Tec is a mobile solutions company focused on content, applications and commerce. Headquartered in Mumbai, the company provides mobile content and commerce solutions that are currently available for the 55 million subscribers strong Indian mobile market.
Geodesic provides innovative software solutions to facilitate Information, Communication & Entertainment (ICE) through mobiles, web, wireless devices and PCs. The company’s flagship Interoperable Instant Messaging (IM) product has been downloaded by over 5 million users worldwide.
Innoviti is a leading provider of wireless solutions and value added payment peripherals for PoS terminals. The company has been successful in spotting niche market opportunities, launching several wireless and PoS peripheral products that have created new market segments.
ItzCash is a subsidiary of one of India’s leading business groups, Essel Group. The company major focus is on the e-commerce domain catering to the business to business (B2B), business to consumers (B2C) and (GC) customer segments.
JiGrahak’s innovation in the technology space is developing an advanced mobile application client supported by a highly configurable, extensible and easy‐to‐deploy backend services framework, which can be used to roll‐out services quickly for both retail and enterprise customers.
MAIA Intelligence is young innovative company in powerful business intelligence reporting and analysis software product space with a mission to democratize BI and take it from few expert users to the operational managers, frontline executives to back office team.
Manthan Systems is a specialist software solutions provider that develops Business Intelligence and Analytics solutions for retail and consumer products industries.
Mauj offers a wide range of off-the-shelf content and applications – such as games, wallpapers, ringtones and news, mobile software and services – such as middleware solutions, roaming applications, SMS gateways - and mobile media solutions.
mChek provides on‐demand solutions for mobile payments and two‐factor authentication. By turning the cellphone into a mobile wallet and authentication device, the mChek application is targeted at the growing number of mobile users around the world who want to use the phone for much more than just voice calls.
Oxigen is India’s first and largest electronic recharge and distribution brand, with over 35,000 retail points of presence in 14 states ramping up to all 21 states touching 100,000 retailers by end of the year.
PayMate is an India based Application Service Provider (ASP) who operates a mobile payment platform backed by an eco‐system that facilitates person to merchant payments using the mobile phone.
TechProcess Solutions Limited (TPSL) is among the leading Indian electronic transaction processing company. The company offers a range of services that spans electronic transaction processing, data processing, document management, software solutions and online payment solutions.
Tekriti Software is a startup focused on building innovative technology solutions in the domains of web 2.0/social software, travel and decision support systems.
TELiBrahma is a leading mobile solutions company, with proficiency in designing mobile solutions with immense value adds to products and services.
Vembu Technologies are the creators of StoreGrid, a powerful Data Backup Software primarily used for Remote Online Backups.

Technorati Tags: India, Startup, Profile, i3, Microsoft

i3 2007 - Startup Showcase

2007-10-23T08:29:22Z

At i3 2007, we showcased nine fantastic start-up companies as part of our ongoing initiative to connect those with ideas to the rest of the innovation ecosystem (financiers, executives, etc).

Each startup participated in a rapid-fire pitch on stage at i3 2007. Click on their company name for a full profile.

Innovation Showcase Startups

Affordable Business Solutions (ABS) offers a suite of affordable, SaaS-based business solutions to the growing SME segment in India.
Epiance is in the Enterprise Performance Improvement (EPI) Business. Epiance’s product Epiplex500 utilises a unique Capture technology designed to create outcomes that improve Employee Efficiency, Compliance & Business Performance
GoDB builds cross platform, cross OS applications for mobile phones and embedded devices. The applications are built on the company’s proprietary application development platform which is a Multi Platform RAD IDE on the Windows Environment.
HeyMath! is a leading provider of Math E-learning products to educational institutions in the K-12 segment. The HeyMath! Learning system is in use by schools in India, Singapore and the United States.
Metalearn is a pioneer in the business of developing e-learning solutions. The company offers end to end solutions in the e-learning space – offering both e-learning products as well as custom development of e-learning solutions.
Mobile2win (M2W) is a leading wireless value added services (VAS) company that provides digital and mobile technology platforms for enterprises and Digital Rights Management (DRM) protected digital business platforms for content owners.
Netxcell develops leading edge mobile applications for Telecom Service Providers, Enterprise Clients and Consumers providing them low cost, flexible and powerful value-added services (VAS).
SMSCountry is a provider of two-way desktop-based SMS text messaging software applications. SMSCountry supplies “Computer to Mobile SMS (Short Messaging)
StumpVision Private Limited, is among the unusual breed of companies worldwide who provide software solutions to the sporting fraternity.

Technorati Tags: startup, i3 2007, innovation, Microsoft

i3 2007

2007-10-19T12:07:37Z

Last week our team ran India is Innovation 2007 (i3 2007) in Bangalore. To say the event was a “success” is both understated and presumptuous. I’ll explain the paradox…

Our goal was to bring together leading investors, executives, luminaries, entrepreneurs, professors, and students for an active discussion on Innovation in India. We exceeded all targets and nearly tripled the attendance of our previous event with over 300 delegates. Given only 400 people were invited, the response on the day was simply unprecedented.

Additionally, 25 Tier-1 media turned up and 35 articles emerged (mixture of online, print, and television). Attendee feedback was overwhelmingly positive and a number of the start-ups showcased are now in discussion for first or second round funding.

On the flipside, to claim success at this stage is short-sighted. At i3, Dr Ashok Ganguly, Chairman of ICICI OneSource Limited and ABP Pvt Ltd and a Director on the Central Board of the Reserve Bank of India, stated “India is Innovation” exudes arrogance. He then went on to qualify his statement by saying we have a long way to go before we can really claim that India is Innovation – though as an aspiration it reflects the passion and ability of India. I couldn’t agree with Dr Ganguly more.

i3 2007 is not intended to be the yearly pinnacle of our ecosystem’s efforts to push India up the value chain. Mr Arun Maira, Chairman of Boston Consulting Group India, suggested we think about the opportunity ahead in terms of innovation by, of, and for India. And our own Microsoft India Chairman, Ravi Venkatesan, framed the financial opportunity of innovation for India in real terms – a 5 times growth potential in GDP. The inspiration and wisdom from our speakers including Kishore Biyani, Dr Mashelkar, Ajit Balakrishnan, Craig Mundie, Professor Sadagopan, and many others reverberated across Asia in blogs and press.

From Microsoft’s perspective, we had the fortune to announce the start of a series of substantial investments to put behind the i3 initiative, collectively packaged as the Microsoft Innovation Framework (MIF). The framework will grow over time along with Microsoft’s commitment to innovation from, for, and with India.

We launched four substantial components to the MIF:

Microsoft Innovation Centre, Pune
Microsoft Start-up Accelerators
Imagine Cup Innovation Accelerators
Business Model Innovation Program

I’ll post additional details about the MIF in future posts, but for those that read the various press clippings and have questions, please contact me directly.

Technorati Tags: ITP, Innovation, Microsoft, India

Why India?

2007-09-12T12:13:00Z

In contrast to the stellar global performance of Indian IT Services companies, the local software industry has languished. To reap the productivity, societal, and competitive benefits of technology, India needs a vibrant software economy providing innovative solutions that meet the country’s unique needs.

The opportunities for technical innovation in India are truly boundless with 8 million small and mid-sized enterprises, 40 million “tiny businesses”, 700 million people living in 600,000 villages, an unorganized $350 billion retail market, a $2 billion Bollywood industry, a $1.5 billion eGovernance industry, and a $1.6 billion remedial education market.

Innovation and intellectual property will unleash the next wave of growth for India, and Microsoft is committed to building an ecosystem to fuel this growth. You’ll see this branded “India is Innovation” or “i3” for short.