India's New Old Thing
While Bessemer’s $23mm investment in Indian construction and engineering management company Shiriram (http://www.shriramepc.com/) may seem like an anomaly given the IT focus typically associated with the firm, it really is a bet on the long-term growth of Inida’s IT industry.
As anyone who has been to India knows, the infrastructure there is reliably unreliable. Even in the swankiest of five-star hotels like the Leela Palace, power outages are an accepted part of doing business. To date, the large outsourcers that have defined the first wave of Indian growth, have gotten around this reality by building their own walled cities, equipped with self-contained power generators and buses to ship their employees to and from work each day. However, as India becomes more of a market unto itself, start-ups like travel site Cleartrip and other Web 1.0 business models, are beginning to attract serious financing from U.S. based venture capitalists. Amidst this growth, demand for old-school infrastructure like power and metallurgical plants, two of Shiram’s core competencies, will likely outpace even the most outlandish revenue projections of India’s next New New thing.
As one of a growing number of VCs having committed to ‘India’ as a strategy, through their investment in Shiriram, Bessemer is hoping to shore up the foundation for web 1.0 and 2.0 start-ups that can’t afford their own walled city just yet. In the meantime, they are getting 33% of a company that is projecting $345 million in 2006 revenue and whose growth prospects are about to bolstered by a swarm of return-hungry U.S. VC money--their own included.
As anyone who has been to India knows, the infrastructure there is reliably unreliable. Even in the swankiest of five-star hotels like the Leela Palace, power outages are an accepted part of doing business. To date, the large outsourcers that have defined the first wave of Indian growth, have gotten around this reality by building their own walled cities, equipped with self-contained power generators and buses to ship their employees to and from work each day. However, as India becomes more of a market unto itself, start-ups like travel site Cleartrip and other Web 1.0 business models, are beginning to attract serious financing from U.S. based venture capitalists. Amidst this growth, demand for old-school infrastructure like power and metallurgical plants, two of Shiram’s core competencies, will likely outpace even the most outlandish revenue projections of India’s next New New thing.
As one of a growing number of VCs having committed to ‘India’ as a strategy, through their investment in Shiriram, Bessemer is hoping to shore up the foundation for web 1.0 and 2.0 start-ups that can’t afford their own walled city just yet. In the meantime, they are getting 33% of a company that is projecting $345 million in 2006 revenue and whose growth prospects are about to bolstered by a swarm of return-hungry U.S. VC money--their own included.
posted by Jesse Lawrence at 7:32 PM
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