Young tech cos stir investor interest

BANGALORE: Investor interest in young companies building technology products from India is rising. On Monday, Sequoia Capital India, one of the largest venture capital and private equity funds in the country, led a $5-million round of investment in Druva Software, which also includes angel investment by the Indian Angels Network. The 2-year-old company is into software making that protects corporate data in employee laptops with most of the activity taking place at its centre in Pune.

Technology products designed to be used by multiple customers are emerging as a prime area of interest for venture investors in India. Roughly, half of the $475 million invested by venture capitalists in 2009 went to information technology companies. In the period up to March 2010, a total of $70 million was invested in companies that build technology products, according to Venture Intelligence, a research firm.

“To build a $1-million revenue base in a segment like IT services is a long process, but with one robust product a technology company can aim for 4-5 fold increase in revenues in a short span,” says Shailendra Singh, managing director Sequoia Capital India Advisors, who feels that the ability to scale up quickly is one of the factors that make IT product companies attractive to venture investors.

Druva Software, which has built up a client base of 250 companies across 23 countries, has until now marketed its product through the web. “We will use this round of investment to build sales and marketing teams across Europe and the United States,” said Jaspreet Singh, co-founder and chief executive officer of the company, which currently offers two products Druva In sync and Druva Phoenix for corporate users.

Research firm Gartner estimates that nearly 38% of corporate data is stored in laptops used by employees, a niche that Druva Software is focusing on. “By removing duplication in communication data like e-mails, we are able to cut down data size by nearly 95%, making storage a simple process for companies,” says Mr Singh, who is part of the 3-member founding team at Druva Software.