Foxconn Technology scouting for Indian start-ups

Taiwanese electronics maker Foxconn Technology Group is scouting for the best deals in the Indian startup market — with help from two of India’s top entrepreneurs Kunal Bahl and Rohit Bansal — joining a growing list of global corporations looking for a share of the action in one of the world’s most dynamic startup hubs.

Over a dozen Indian startups met Wen-Hsin (Vincent) Tong, chairman and director of investments at FIH Mobile Limited, an investment arm of Foxconn, at the New Delhi office of Snapdeal last weekend, according to two people with direct knowledge of the initiative.

The meetings, designed as fact-finding missions, were set up for Foxconn to gain a deeper insight into the Indian startup ecosystem.

Sources indicate that among the start-ups present were several mobile-based ventures that offer on-demand services. “All the startups who met (Tong and Bahl) have raised significant amounts of venture capital funding and several of them are already in talks for a new round of equity financing,” said one of the persons quoted above. Foxconn, however, declined to confirm the meetings.

“As a matter of company policy, we do not comment on rumours or speculation. As we have stated in the past, we would consider investments in India if they made commercial sense,” a Foxconn technology group spokesperson said in an emailed reply to ET’s questionnaire. Snapdeal declined to comment on the developments. Foxconn’s interest comes at a time when several Asian corporate behemoths are looking to invest in consumer-focused technology startups.

Asian corporates made 600 investments into companies in 2014, a 56% rise in deal volumes compared to 384 the year before, according to CB Insights, a venture industry database.

Earlier this month ET reported that Foxconn is one of the frontrunners to invest in Jasper Infotech, which owns and operates Snapdeal.com. The Taiwanese manufacturing giant is a contract manufacturer for a number of iconic brands, including Apple, Amazon, Sony and Microsoft.

Last week, government officials announced that the multinational company was in talks to manufacture Apple’s iPhone in India. Foxconn has said it is aiming to develop 10-12 facilities in India, including factories and data centres, by 2020.

Bahl and Bansal, apart from building Snapdeal into one of India’s biggest ecommerce companies estimated to be worth about $5 billion, are also among the country’s best-known angel investors. They have backed a number of ventures like taxi aggregator company Ola, online food delivery service provider TinyOwl and online real estate portal Housing.com

The number of strategic investors scouting for investments in India have risen exponentially over the last two years. Apart from South Africa’s Naspers, which is an investor in India’s biggest ecommerce company Flipkart, others such as Softbank have promised to invest close to $10 billion in the country.

The Alibaba Group, the world’s biggest ecommerce company which has invested, through an affiliate, in Noida-based mobile commerce and technology firm Paytm, recently brought on board noted merchant banker Kshitij Karundia and Silicon Valley veteran Guru Gowrappan to chart out its investment strategy for India.

This story was originally published in The Economic Times