Financial Daily from THE HINDU group of publications
Tuesday, Jul 06, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jul 06, 2004 |
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Info-Tech
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Venture Capital Midas Comm gets $10-m funding from Argonaut Raja Simhan T.E.
Chennai , July 5 MIDAS Communication Technologies Pvt. Ltd. has got a $10 million (Rs 45 crore) funding from Argonaut Private Equity, a US-based venture capital firm with a major focus in telecom. This is the first funding for Midas, and for Argonaut the investment is an entry into India, said Mr Shirish B. Purohit, CEO, Midas Communication. The Chennai-based firm develops technologies for the last mile in the access network. According to Mr Purohit, Midas will use the funding to spend on prototype testing and develop new products. The company is developing "next generation" wireless products, and the funding will help Midas market them in India and abroad. Midas is working on an enhanced version of corDECT that would provide more than double the speed of the current product. To tap the domestic and global markets, the company needs to reduce price of products. This calls for new assets and funding, he told Business Line. On merger of sister concern, Banyan Networks, with Midas, Mr Purohit said the integration between the two is almost over, and the Madras High Court has to approve the merger. About 140 Banyan employees have come on board Midas, and the revenue of the combined firm for the year ending March 31, 2004 was $58 million (Rs 260 crore) — of this, $53 million came from Midas. The target for 2004-05 is to double revenue to about $110 million (Rs 500 crore). The domestic and global telecom markets are on a bull run, and Midas is entering new markets, including Russia, Tunisia and SAARC countries (Sri Lanka, Bangladesh and Nepal).
To go public MIDAS Communication is aiming to go public in about two years. Today a company's size matters a lot while dealing with competition globally. The merger between Midas and Banyan provides the size, while going public will enhance the company's brand name in India and abroad, said Mr Purohit. The public offer will also provide exit route to investors, if he said. Argonaut was the first investor in Midas Communication. Investors in Banyan Networks are Mr Ray Stata, Chairman, Analog Devices of US, Intel Pacific Corporation, IL&FS Venture Corporation, Princeton Global Fund and Himachal Futuristic Communications, says Banyan Web site.
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