Bruce Wehlau

Bangalore-based Axcend India, a venture capital firm, has short-listed around six start-ups focusing on the hi-tech areas of IP switching, development of protocol stacks and wireless LAN to make an early stage funding. Having launched its India operations in September 2001, Axcend is yet to make any strategic investment in the country. “Since September, we have spoken to over 107 companies and around fifty of them fitted into our portfolio. But because of the differences in aspirational levels the deals didn’t materialise,” says Bruce Wehlau, CEO, Axcend India. Recently he was close to investing around $1 million in a start-up, but it didn’t work out due this reason.

When questioned about the reasons for not closing any deals till now, Wehlau said that most Indian start-ups are not well informed about the market. “Most companies we talked to have cost-effective engineering solutions, but scalability is a dogging issue. Also, there are no clear differentiators,” says Sai Sreekanth M, chief technology officer of Axcend. He also adds that a majority of these enquiries are not ‘money losing propositions, but they somehow don’t fit into the overall requirements.

The company is now planning to woo potential firms by promotional campaigns like organising seminars, sponsoring incubation centres in the IITs, etc. It will also be launching a direct mailer campaign soon, targeted at telecom companies.

“VCs do have a role to play in helping these companies identify scalable ideas and some of them like Jumpstartup have been doing this,” says Wehlau. Most of the proposals received by him are from IIT students, IT professionals and existing companies. According to him, Axcend is under no pressure to make investments within a certain period of time. “We will make the investment only after we are convinced about the idea,” states Wehlau.