V Balakrishnan and Mohandas Pai-backed Exfinity fund raises Rs 100 crore

BANGALORE: Early-stage technology focused Exfinity, headed by industry veterans including former Infosys directors V Balakrishnan and Mohandas Pai, has closed a Rs 100 crore round.

The fund, set up in late 2013, will invest in about 15-17 early-stage startups in analytics, mobility and cloud, and fund each with $1 million- $2 million (Rs 6 crore - Rs 12 crore).

“The next $100 billion will not come from services. It will be products, platforms and IP and large companies are not investing enough in this space,” said Balakrishnan.

Experts feel that the technology background of the investors could work in the fund's favor.



“Since startups tend to go to them for technical help, it is likely that they will get a first look at deals,” said Mayank Rastogi, a partner at private equity and transaction advisory services of Ernst & Young.

Balakrishnan said in addition to Rs 100 crore, another Rs 25 crore was set aside as a greenshoe option, a provision that allows the sale of additional shares in case of high demand.

“We are not going to invest in just ideas. We are looking at startups that have a revenue model in place,” said Balakrishnan, who said his fund help entrepreneurs with industry connect and know-how to get to the next level.

Exfinity is currently looking at three startups focused in the technology space. “We are doing due diligence on them,” said Balakrishnan.

Besides Balakrishnan and Pai, others backing the fund include former Wipro chief executive Girish Paranjpe and former iFlex Solutions CEO Deepak Ghaisas, who have each invested Rs 5 crore.

Experts say that this successful close is unlikely to push other industry veterans to start their own funds.

“They (technology professionals) have the experience in corporate management, not fund management. I suspect this will become a wider phenomenon,” said Rastogi. “We will see more of professionals pooling in their own money than raising funds from third parties,” said Rastogi.