Wipro is setting up a corporate venture arm to be spearheaded by Rishad Premji that will initially invest up to $100 million (Rs 600 crore) in startups to help the country’s third-largest software exporter fill the missing innovation strand.
This first-of-its-kind venture arm by an Indian outsourcer to be overseen by Rishad, son of Chairman Azim Premji, underscores the company’s recognition to existential threats faced by traditional IT companies from startups focused on disruptive technologies, including data analytics and machine-to-machine learning, said people familiar with the development.
Globally, some of the biggest technology names such as Intel, Cisco and Dell have dedicated corporate ventures for investing in startups and mature ideas that are disruptive.
Barring Accenture, which shut down its venture arm in 2002, none of the large IT services companies has experimented on this front.
“Very soon you will hear about this corporate venture fund that the company will be starting,” said a person familiar with the development. adding that Wipro will invest between $80-100 million (Rs 480 crore to Rs a600 crore) in terms of venture funding for the first year.
“This sum ($80-100 million) is for the first year. And then it will grow. There will be more coming out of it,” said the executive.
Rishad is already the head of strategy division at Wipro and according to another person, is in the midst of putting together a team that will assist him on taking decisions, including evaluating projects that need to be incubated by the Bangalore-based IT firm.
Anurag Srivastava, who is overseeing the Change the Business Unit at Wipro, will be the one of the key members of this team.
Two other executives who will be reporting to Rishad are Jagadish Velagapudi, head of strategic programs, and Haripriya Rama Iyer, who in April was given a senior role in the strategy division.
A questionnaire sent to Wipro remained unanswered. Two people familiar with the development said that the company could make an announcement as early as next month. “Wipro wants to be at the front-end of technology. That fs the ambition, h said a second executive, adding that startups from across the world, including India, will be considered. gInnovation is not restricted to the US. So the thinking is why to limit to any geography.”
ET also learns that the corporate venture arm will be part of Change the Business Unit, one of the two young business divisions the company carved out earlier this year. The company has outlined gmassive investments h in technology platforms, including automation and digital space, results of which should start showing as early as June next year, the executive said.
Over the past few years, Wipro has already made minority investments in two such startups, including $5 million (RS 30 crore) in US-based Axeda, as it aims to offer to offer machine-to-machine learning solutions for clients and an over $30 million (Rs 180 crore) investment in Opera, a New Jersey based data analytics company.
Some experts back this latest effort by Wipro as they believe it is difficult to make an acquisition in a space where every customer in an industry has its unique own requirements.