VC PASSAGE TO INDIA

As part of a spurt of new investments in Asia, Cisco Systems in September announced the launch of a venture capital operation in India.

Cisco will focus on investments in early stage and more mature companies that offer strategic opportunities for the networking giant. In addition to backing networking-related ventures and new technologies, a Cisco spokes person said the company's Indian VC arm would be used to gain insight into how to do business on the subcontinent.

The move is part of a broad sweep by the networking equipment specialist as it looks to capitalise on the networking growth market of Asia. Cisco also announced it would spend $32 million (€26 million) over the next five years on a ([A-z]+)-based research center and would set up new financing services for small and medium-sized business clients in Korea.

The lure of India for venture capital money certainly isn't a new phenomenon. According to the Asia Private Equity Review, India had the biggest leap in investments in the Asia-Pacific region for the first half of this year – $305.3 million (€249 million), up from $22.1 million (€18 million) in the first half of last year. The overall economy has also grown at a 15-year clip of 8.2 percent per year through to the end of March, with significant expansion in the consumer market.

Many investors are attracted by the country's well-educated and techsavvy populace, as well as its low valuations. Cisco said it expects to take advantage of the large wave of Indian technology managers returning to India from the US. During the 1990s, at the height of the tech boom, the best of India's tech talent was skimmed off by US companies like Cisco. Many of these individuals acquired a taste for American style entrepreneurship, and are returning home to play important roles in the creation of new companies. Many of them know just the kind of business plans the likes of Cisco want to see.