SAP Ventures, the investment arm of the world's largest maker of business management software SAP AG has invested $10 million in Delhi-based mobile internet services firm One97 Communications. SAP is a lone investor in this third round of funding.
One97 founded in 2000 by engineer-turned-entrepreneur Vijay Shekhar Sharma delivers mobile content, advertising and commerce services to customers such as Airtel, Vodafone, Afghan Wireless, Coca-Cola, Nestle, Samsung and General Motors.
With this investment, One97 plans to expand its reach in emerging markets such as Asia, Africa, hire talent and do research and development.
Mobility and emerging markets are both key focus areas for SAP Ventures which this year launched a new $360 million fund.
"One97 is right in the middle of exploding mobile usage among consumers in developing countries who are using their mobile phones to access the internet, play games, buy content and shop online," said Jai Das managing director at SAP Ventures, headquartered in Palo Alto, California.
"I am right now holidaying in Cochin, and it is amazing to see how people are connected and accessing internet differently in India," added Das.
The benefit of tapping booming mobile and internet is paying off handsomely. This year One97 crossed a turnover of Rs 200 crore.It had just Rs 11 crore in revenues three years ago.
Experts such as Ajit Balakrishnan, founder of online media major Rediff.com believes India will become the largest internet market in next 5-7 years with 400 million users, as new investments to build the infrastructure are going to happen in next two years.
"The opportunity is big. Like an early car, internet is a horseless carriage in India right now. It is sandbox play due to lack of infrastructure and red tape delay of projects" said Balakrishnan.
Investors are also betting big on hot sectors that includes internet and mobile market.
Private equity investments in first nine months of 2011 have surpassed the entire of 2010 as deal sizes grow significantly.
PE firms invested about $2,249 million across 98 deals during the quarter ended September this year, according to a study by Venture Intelligence, which tracks private equity,M&A activity.
IT & ITES companies attracted $437 million across 29 transactions, according to the report.
Last month, in one of the largest global deals in the mobile internet space, Japanese internet major, SoftBank Corp invested $200 million in Bangalore based mobile advertising company InMobi.
This was followed by the $40 million round raised by online group buying service Snapdeal.com from Bessemer Ventures with participation from existing investors IndoUS Ventures and Nexus Ventures.
Blackstone invested about $33 million in financial inclusion-focused tech firm FINO.
For Sharma who hails from Aligarh a small town in Uttar Pradesh it has been a meteoric rise. Sharma started his first business venture XS Corps, a web solutions firm while still studying at college. The start-up was later sold to US based technology firm Lotus Interworks in 1999.
One97 which started with providing caller identification facility moved up the value chain by diversifying into services such as music , customer analytics and sending mobile phone voice messages to farmers for better agricultural practices.
"Initially it was a struggle due to lack of funds. We had to keep on innovating to survive," said Vijay Shekhar Sharma, CMD of One97.
The firm has raised a total funding of Rs 83.6 crore from marquee investors-- Intel Capital, SAIF Partners and Silicon Valley Bank.
One97 now has a team of 1,000 people, who are spread across India, Middle East and Africa.
For SAP, this is the second India investment this year. It invested $10 million in local search engine Just Dial along with Sequoia Capital Global Equities in June.
SAP which counts social media major LinkedIn, open source solutions major Red Hat among its top portfolio companies had earlier invested in Indian technology firms such as Connectiva, iYogi and Newgen. " We are scouting for more start-ups," said Das.
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