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Patni brothers plan to raise $40 mn to fund Big Data firms

LiveMint logoLiveMint 30-05-2014 Malvika Joshi

Mumbai: Amit Patni and Arihant Patni plan to raise about $40 million (around `235 crore) to invest solely in companies that provide Big Data analytics, a little more than three years after the brothers launched Nirvana Venture Advisors, an early-stage fund that invests in technology-driven start-ups.

“The new fund will invest in Big Data vendors that have a large customer base in the US. The Big Data space is much more evolved in the US than what it is in India right now,” Amit Patni, the older sibling at 48, said in an interview.

Arihant Patni, 37, calls Big Data analytics, a concept that involves analysing large amounts of unstructured data generated by traditional businesses as well as social media posts and videos, “the next big wave” in technology.

The Patni brothers were introduced to Hive Llc, a company that incubates, funds and launches data-driven businesses, through the Nirvana network, co-founded and anchored by Rajan Mehra.

They invested an undisclosed amount in the US-based company in December 2012, and in the following October, closed their first investment in Flutura Decision Sciences, a Big Data analytics solutions firm, with the help of Hive.

Venture capital experts say the Patni brothers may get a first-mover advantage as there are no funds dedicated to investing in Big Data.

“While there are no Big Data-focused funds, the challenge lies in helping the firms attain a critical mass and size. The potential in Big Data is huge, but most of them have not been able to generate enough revenue as yet,” said Harish H.V., a partner at business consulting firm Grant Thornton.

Both the Patni brothers have been active members of the Mumbai Angels, Indian Angels, VentureNursery and the Indus Entrepreneurs networks, promoting entrepreneurship through proprietary investments.

In January 2011, they launched Nirvana Venture Advisors, a $40.5 million fund that has closed five investments so far. It is headed by former eBay India chief Mehra.

The current portfolio of Nirvana includes online gaming business Games2win, Remedinet, which offers technology for management of community and government insurance schemes in healthcare, and TranServ, a platform that allows banks to outsource prepaid card services.

“We will make about seven more investments in the next 18 months,” said Arihant Patni.

The Patni brothers decided to turn investors from being entrepreneurs in 2011 after the Patni family sold Patni Computer Systems, where N.R. Narayana Murthy and most other co-founders of Infosys Ltd once worked, to Nasdaq-listed iGate Corp. in a $1.22 billion deal.

iGate and private equity (PE) firm Apax Partners had signed definitive agreements with the three founders of Patni—Narendra Patni, Gajendra Patni and Ashok Patni—to acquire their 45.6% stake, and with PE firm General Atlantic Llc for its 17.4% stake.

While Gajendra and Ashok Patni were in favour of the move, Narendra Patni was a reluctant seller. The Patni brothers, meanwhile, do hold a minor stake in PCS Technology Ltd, an IT solutions firm.

The Patni brothers, sons of Gajendra Patni, appear happy with their role as investors.

“We have moved from an operational approach to investment approach,” said Amit Patni.

“It takes 25 long years to build a $2 billion company like Patni. Instead, by turning into investors, we can help multiple companies grow at the same time,” reasoned his brother.

The Patni brothers are also looking to strengthen their foothold in the family office advisory, given the growing number of entrepreneurs and high networth individuals (HNIs) in India.

Having started their own family office in 2002 for managing wealth, in March they invested an undisclosed amount in Mumbai-based advisory firm Waterfield Advisors Pvt. Ltd.

Waterfield offers comprehensive family office solutions for consolidation of personal and family wealth, managing succession, and helping entrepreneurs develop and grow their businesses.

According to the Credit Suisse Global Wealth Report 2013, there are 1,760 ultra-HNIs with wealth of over $50 million, and 770 with wealth more than $100 million, in India.

malvika.j@livemint.com

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