Wipro and Infosys come under the boards’ scrutiny for their startup investments
Bengaluru, India | Red Newswire | Dec 23, 2015 Last Updated at 12:43 PM IST.
Wipro and Infosys are taking a keen interest in building their relationships with the startups. But, their boards aren’t so happy with this. They are taking measures to make Rishad Premji and Vishal Sikka accountable for their big bets on startups.
Rishad Premji - the chief strategy officer at Wipro and Sikka – CEO of Infosys are making major efforts in identifying startups that could boost their company’s business.
Last week, Jake Klein (VP of corporate development at Infosys) was given the additional responsibility of board observer in the Israeli startup Cloud Endure Ltd. In which Infosys has a $4 million stake.
On the other side Wipro will be evaluating all the startups in which it has invested twice a year. The evaluating board will include Azim Premji and nine others.
A company executive said, “Wipro Ventures is part of Wipro. And so it is still the investors with whom we have to share what and how the company is spending money. It’s only natural that all investments made by it are also discussed by the board, just the way it discusses acquisitions.” One of the evaluation metrics is the number of people using the startup’s technology.
However, Wipro is more focused on future technology needs while making startup investments. For now, it is not known whether Infosys too will follow the same strategy. The two companies declined to comment.
Together Wipro and Infosys have made investments in nine startups worth $60 million. An Infosys executive said, “When we believe a start-up is of interest to us, we partner with it and we pick a minority stake. So, this obviously gives us an exclusive arrangement under which in some deals, we can offer the technology of our start-up to our client. And if later on, we are able to scale up our start-up engagements with many clients, and if the other party also agrees, we will certainly increase our investment and then like to have a board seat.”
According to experts, having a board observer does makes sense as most of these companies are new in the venture field.