Intel Cap sees steady growth in venture funding
By Anshuman Daga
BANGALORE, March 21 (Reuters) - Chipmaker Intel Corp's (NasdaqNM:INTC - news) investment arm expects to invest $300-400 million in technology firms this year, maintaining 2001's pace despite a tough year.
Intel Capital, a decade-old arm of the world's number one computer chipmaker, is keen to make investments in network equipment industries, software and high-tech sectors, vice-president Claude Leglise told Reuters late on Wednesday.
``We are generally speaking, very optimisic. I think it's a very, very, good time to invest,'' he said. Intel Capital has built a nearly $2 billion portfolio with stakes in about 500 companies, which it hopes will help expand its business.
It pumped about $350 million into 175 companies in 2001, a steep fall of 75 percent from $1.4 billion invested in 350 firms a year ago.
``Companies are (now) a lot more affordable but probably the most profound aspect of valuations is that the expectations of financial returns are consistent wth the expectation of real returns,'' Leglise said.
Venture capital firms suffered heavily last year after the dot-com debacle and a falling stock market burned the appetite for mergers, acquisitions and initial public offerings.
``The entrepreneurs we see today are more committed, more ready to make the personal sacrifices that it will take to be successful. So the quality of people we see is better than what was two years ago,'' he said.
Industry players expect venture investments to stabilise in the United States in 2002 after a steep drop last year. In 2001, U.S. venture capital funding totalled $36.5 billion, down 63 percent from a record $99.6 billion in 2000, industry data shows.
ENGINE OF GROWTH
China and India, which are growing rapidly despite a global economic slowdown, figure prominently in the $500 million which Intel Capital has invested in more than 70 companies in Asia.
``Overall in Asia, we are doing a third of our deals in China, a third in India and the rest in Taiwan, Singapore, Australia and Korea,'' Leglise said.
Intel Capital, in partnership with venture capital funds, usually takes stakes of less than 20 percent in both private and public companies globally.
It has made investments in Hong Kong telecoms and Internet firm Pacific Century CyberWorks and Samsung Electronics Co .
``It's (Asia) a quarter of our investments last year and I would expect that this would keep growing as a percentage,'' Leglise said.
He listed India, China, Mexico, Brazil and Eastern Europe as five key investment destinations for Intel, where it expects to fund businesses to boost the local technology markets.
Over the past three years, Intel Capital has invested more than $100 million in over 30 Indian firms, mostly privately-held. These include software developers, portals, telecom product players and other high-tech companies. |
