Leading technology services and consulting firm, Infosys Limited (INFY - Free Report) , followed its recent investments in TidalScale and UNSILO with another one, as it inked a definitive agreement for an investment of INR 31.6 crores (approximately $4.6 million) in an India-based early stage venture fund called Stellaris Venture Partners.
This investment is toward the first close of Stellaris’ fund and is scheduled to be completed on or before Dec 15 this year.
India’s technology startup ecosystem is in a dynamic stage today and has the potential to build breakthrough companies on a global scale. The ecosystem is witnessing swift growth in areas such as Internet of Things (IoT), cloud computing, artificial intelligence and big data.
Stellaris is intent on capitalizing on this vibrant environment, and backing entrepreneurs who are building applications for Indian SMBs, global businesses and consumers in verticals such as healthcare, financial services, retail and education.
Its investment team holds extensive experience working in global technology companies. Further, Stellaris boasts a robust network of successful entrepreneurs and advisors, in addition to a strong track record in venture capital, having invested in companies like Taxisforsure and Bigbasket.
Stellaris’ comprehensive operational and domain expertise in enterprise software and services in both India and the U.S. makes it uniquely positioned to leverage on India’s capital efficient talent pool. With this investment, Infosys hopes to gain early access to innovative Indian firms that are redefining the future of companies across the world.
INFOSYS LTD Price and Consensus
Infosys has made a string of startup investments, especially overseas, ever since it created its $500 million Innovation fund, soon after current CEO Vishal Sikka took over. The Fund was launched in 2015, with an aim to invest in innovative entrepreneurial ventures in domains related to the company’s core business. Investing in start-ups also has the advantage of getting products based on new technologies to the market faster.
Specifically, the company is interested in next-generation solutions and technologies, such as automation, Artificial Intelligence and pervasive connectedness, in addition to collaboration and design technologies.
Infosys has made eight such investments so far, according to News Corp VCCEdge, the data and research platform of VCCircle. Earlier this week, the fund announced an investment in UNSILO, a Danish artificial intelligence startup focused on advanced text analysis. It also invested in big data startup – TidalScale – earlier this month.
The company has previously invested in two cloud-computing start-ups — Israel-based Cloudyn and CloudEndure. It also invested in two data-analytics start-ups — Waterline Data Science Inc. and Trifacta.
Besides investing in startups, Infosys acquired four companies last year, which include Panaya, Kallidus Technologies, Skava and Noah Consulting.
Such strategic investments and acquisitions have served to strengthen Infosys’ core competencies and will continue to fortify its portfolio as well as expand its market share.
Infosys presently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the same space include Barracuda Networks, Inc. (CUDA - Free Report) , Amdocs Limited (DOX - Free Report) and CDK Global, Inc. (CDK - Free Report) , each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Barracuda Networks is a California-based security and storage solutions provider. The company has a striking earnings surprise history over the trailing four quarters, having beaten estimates in each of them, for a remarkable average of 525%.
Amdocs Limited is a leading provider of customer care, billing and order management systems for communications and Internet services. The company has a decent earnings history, with an average positive surprise of 2.8% over the trailing four quarters.
CDK Global provides integrated information technology and digital marketing solutions to the automotive retail industry. The company has an impressive earnings surprise history over the trailing four quarters, beating estimates all through for an average of 9.2%.
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Note: $1 = INR 68.4424 (as at Nov 23, 2016)