Murthy's Catamaran to be sector-agnostic while investing

Infosys chief mentor NR Narayana Murthy today said the venture capital fund set up by him will have a wide portfolio, and not focus on any particular sector.

Murthy has formed a Rs600 crore venture capital fund — Catamaran Investment Pvt Ltd — to help incubate start-ups in the country.

"We will have a wide portfolio for both horizontal and vertical opportunities. By vertical, I mean we will be doing angel investing, early-stage investment, mezzanine-stage, late-stage investment. By horizontal, I mean any sector of economy," Murthy said.

Murthy has put in Rs174.30 crore in the venture capital fund by off-loading his 0.13% stake in Infosys, while his wife Sudha Murthy had sold two-million shares of her total Infosys holding to raise around Rs430 crore.

Murthy said that he was in touch with a lot of entrepreneurs, and many of them have sent their proposals.

"We are waiting for our office, and by March 15, we will be more active," he said.

"We will be evaluating ideas, viability of business plan, scalability of business, leadership capability of entrepreneurs and market readiness, and then will encourage the companies," Murthy said.

The Infosys founder said that investments in start-ups would depend on various factors.

"There is no specific sum we will be putting in... it depends on idea, their funding requirement, at what stage a start-up company is coming, valuation, our need for balancing portfolio and need for mitigating risk," Murthy said.

He said that start-ups in the IT sector should focus on niche segments and come out with unusual ideas.

"The way any new start-up in the IT sector can succeed is by focusing on niche areas, small verticals and doing certain unusual things that big companies are not doing," Murthy said.

"Today, there are many companies in vanilla IT services area that have huge cash, and build big brands, and it is not easy for small companies to become another vanilla IT services company," Murthy said.

Niche sectors could be specialising in retail, pharma, SMEs and providing mobile solutions, among others, he said.

The idea of the start-up has to be much more specialised than the bigger companies, he said.

"They (start-ups) have to demonstrate that the idea which they are bringing to the table are not the idea big companies are bringing," Murthy said.