Mayfield Fund plots new route to India
San Francisco Chronicle - June 5, 2007
by Jessica Guynn

For a few years now, Sand Hill Road has been mapping its way to India. Mayfield Fund has plotted its own course, but its itinerary is different than most.

Mayfield, which is investing in India through its latest, $375 million fund, plans to focus on investments in consumer services (retail, entertainment, travel), infrastructure (power, roads, buildings, waste disposal), manufacturing and offshoring.

Mayfield's investments in India are being led by Navin Chaddha and Robin Vasan, who are helping one of Silicon Valley's oldest venture capital firms make its mark in India by recruiting two seasoned investors there, Nikhil Khattau and Vikram Godse.

"We are not just looking through the lens of technology," said Chaddha, a managing director of Mayfield Fund who grew up in New Delhi. "We believe India offers a similar opportunity that existed in the U.S. in the 1950s and 1960s with the creation of the middle class."

Chaddha is bullish on India for a handful of reasons: the country's booming economy and rising gross domestic product, its 300-million-strong middle class fueling demand for goods and services, the large educated talent pool, a robust legal system, and a domestic stock market with more than 9,000 companies.

For example, five years ago, India had 5 million mobile subscribers. Last year the world's fastest-growing wireless market had 160 million, Chaddha said.

With the rise of globalization, American venture capitalists increasingly are looking to invest overseas. "Even five to 10 years back, venture capitalists used to do deals in their backyard within 20 miles of Sand Hill Road. Now we are doing deals 10,000 miles apart," Chaddha said.

Dozens of Western venture capital and private equity firms are hanging their shingles in India. Investment activity there tripled to $7.5 billion in 2006. Mayfield invested in two Indian companies in 2006, Tejas Networks and Seedfund, an early-stage technology fund.

Mayfield, famous for taking public some of technology's household names, including Compaq and Silicon Graphics, has raised 12 funds, funded 475 companies and backed 105 initial public offerings since its founding in 1969. Now it hopes to work its mojo in India, not only investing in Indian companies, but in American companies targeting the Indian market.

"Our job is to pick areas where we believe money can be made for our investors and built-to-last companies can be created," Chaddha said.