The Hindu Business Line : Norwest plans to exit Veraz Networks

NORWEST Venture Partners (NVP) proposes to exit from Veraz Networks once the company floats its initial public offering in about a year when it goes for a Nasdaq listing.

Mr Promod Haque, Managing Partner of Norwest, said, "In all such investments, we hope to recover at least 10-15 times our initial investment."

Norwest is one of the world's largest technology venture capitalists. Veraz is one of the successful hybrid entities incubated by Norwest.

Norwest has invested about $20 million in the company, he added.

Veraz, a provider of next generation communication networks, is based in San Jose and has a development facility in Pune.

Veraz's annual revenues are about $70 million and 50 per cent of these are from outside the US. India accounted for almost 15 per cent of Veraz's revenues, driven by several large contracts that it had won recently.

The company has plans to double its staff size in Pune to 130 by the year-end. Apart from NVP, Veraz is privately funded by ECI Telecom (ECIL), Argonaut Private Equity, Battery Ventures, Kleiner Perkins Caufield & Byers and Levensohn Venture Partners.

Mr Haque said Norwest was prepared to fund more entities in the country. However, he said that such investments would be selective.

"NVP would be interested in funding companies that provide equipment, technology and develop products of global appeal for the use of service providers. "

Besides, he said, Norwest preferred investing only in hybrid companies. Hybrid implied entities which had their front office operations in regions contiguous to markets, especially the US and Europe and back-offices in regions such as India.

India has benefited indirectly as a result of this hybrid matrix, he said.

"About 30 per cent of the companies funded by NVP has development centres in the country. Each company ends up investing at least $5 million on an average that comes to India indirectly over a 2-3 year timeframe," he added.

NVP would also like to incubate some biotechnology and biopharmaceutical companies.

However, NVP has still not finalised any firm investments in the sector, he added.

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