Former Norwest VP exec's new fund for SaaS dealsWhat's the news?
Mohan Kumar, a former partner at Norwest Venture Partners and Nishant Rao, the former chief operating officer at the Chennai-based SaaS firm Freshworks, have launched Avataar Venture Partners, whose maiden fund will have HarbourVest, the global fund-of-funds, as its single Limited Partner or sponsor. The $300 million fund will invest in business-to-business (B2B) and Software-as-a-Service (SaaS) companies.
What's the plan?
The focus is to back companies with at least $15 million in recurring revenue, and scale that to $100 million, Kumar told ET. They will also work deeply with its portfolio companies in terms of operations. The fund has already acquired stakes in six companies from the Norwest portfolio in a bulk sale. This includes Zenoti, Capillary Technologies, Appnomic Systems, CRMNext Inc, Manthan Systems and ElasticRun, all of which were part of Kumar’s portfolio during his time at the US-based venture capital firm. Read more.
Fintech in flux over credit bureau data access
What's the news?
A recent directive by the Reserve Bank of India asking banks and non-bank lenders to stop ‘agents’ from accessing credit bureau data has thrown the banking technology sector into a state of flux. Software services providers, who directly work with banks to evaluate credit quality, are likely to be affected the most, industry executives told ET.
Why does it matter?
The broader financial services industry has been hit by frequently changing regulations, from customer onboarding through Aadhaar to accessing bureau data for evaluation.
One section of bankers and top fintech entrepreneurs say the order may apply only to the appointment of ‘agents’ by financial institutions, but another set of players fear it may stop unregulated fintech startups from accessing all bureau data, hitting them adversely.
Many banks appoint large software companies to set up analytics capabilities that help evaluate retail loan applications better, and experts believe this move could drastically affect that business. Read more.
Indian IT wages vs local wages in US
What's the news?
Indian IT services firms pay their staff in the United States average wage that are higher than those paid by local companies, a report by market researcher IHS Markit has showed.
What does the report say?
India-based and India-centric IT firms paid $96,300 on an average in 2017 for software programmers, both local as well as H-1B visa-holders, which was nearly 2% higher than the median wage of $94,800, the report sponsored by Nasscom showed.
Although the total sales of these companies were $129 billion in the US during the period, sales and spending through their US purchasing networks led to an additional $35.7 billion in sales activity. This report has now have been submitted to the US Congress to counter misconceptions and provide an analysis of wages paid to both local hires as well as H-1B visa holders. Read more.
TCS sees big opportunity on e-governance projects
What's the news?
TCS is seeing greater demand to transform India’s first generation eGovernance projects, as the government steps up use of such projects, including the one for income tax filings.
Where is the demand coming from?
TCS is currently seeing two types of demand. First, for the transformation of the first generation of eGovernance services using newer technologies such as cloud and analytics, and second, for newer projects, from healthcare to smart police and smart cities, Tej Paul Bhatla, head of TCS’ public services business unit, told ET. He said that they have three to four requests-for-proposal ongoing at any given time.
India contributed about $1.2 billion to TCS’ revenue in fiscal year 2019, although the company does not give a breakup of government and private sector revenue. Last year, IT sector researcher Gartner estimated that IT spending in India would grow by 6.7% to $89 billion in 2019. Government spending on IT is estimated to be around one-tenth the overall spend. Read more.
Tiger Global's potential real estate bet
What's the news?
Private equity investors Tiger Global and General Atlantic are set to lead a $100-$130 million funding round in real estate platform NoBroker, more than doubling its valuation in three months to $400 million, three people in the know of development said. Tiger Global is also leading a $55-60 million round in MyGate, a security app for gated premises, sources said. It had previously backed Nestaway, a marketplace for shared rentals
What's the significance?
For Tiger, these are all complementary bets in a very large and fragmented real estate space in India, an investor directly aware of Tiger Global’s plans told ET. This year, Scott Shleifer, partner and head of private equity at Tiger Global, has backed almost 20 companies (new and follow-on) across stages and sectors, and continues to be in talks with several others.
NoBroker’s focus on being a transaction-led, asset-light business is luring investors and they are now looking to build products that generate customer recall beyond a one-time touchpoint of rental and sale, including paying monthly rent, said an investor requesting anonymity. Read more.