Intel’s growing reach

Intel Capital’s recently announced $50m (€42m) Brazil Technology Fund is the Santa Clara-based firm’s latest move to strengthen its position in emerging markets. Judy Kuan reports.

As it continues to strategically expand its reach into the far corners of the globe, Intel Capital – the venture investing arm of US-headquartered semiconductor manufacturer Intel Corporation – has established the $50 million (€42 million) Intel Capital Brazil Technology Fund, to invest in the local IT industry.

Our growth is happening in international markets.
David Thomas, director, Intel Capital Brazil

Intel Capital is familiar with most – if not all – of the world’s fastest growing markets, whether emerging or emerged. In the mid 1990s, Intel Capital began its investment activities in Israel, and at the end of that decade, built up its presence within the technology sectors of the world’s strategically significant emerging markets – Asia, Central/Eastern Europe, Russia, and Latin America – by investing capital on behalf of its parent company.

However, Intel Capital did not begin investing with a dedicated funds-based approach in these markets until last year, when it launched the $200 million Intel Capital China Technology Fund in June.

Now, the firm is increasingly utilising a fund approach to its overseas investments. In November 2005 it announced the establishment of a $50 million tech fund focused on the Middle East and Turkey, and then one month later announced the creation of the $250 million India Technology Fund.

Although the firm made its first acquisition in Russia in 2004, Intel Capital does not yet have a dedicated fund for investing in that country. The new Brazil fund is Intel Capital’s first fund vehicle in the Latin America region, although it has made a number of investments in the region in the past, including four investments in Brazil in 2005.

Regarding the firm’s global strategy, David Thomas, director of Intel Capital in Brazil, tells PEO: “If you look at Intel’s core business, our growth is happening in international markets. When you see all these fund announcements, it’s associated with where we see opportunity for growth in general.”

As Intel Capital continues to solidify its international presence, the question now is where next the firm will identify enough investment potential to dedicate a fund. In addition, given that a number of venture units at other tech-focused corporations either do not invest through dedicated funds – such as Motorola Ventures – or were scaled back dramatically following the dotcom downturn – for instance, Dell Ventures – how Intel Capital’s role continues to evolve within its parent company’s overall structure will also be of interest.