Infosys drops plan to have dedicated person for managing Innovation Fund

Infosys, India’s second largest IT services company, had decided not to go ahead with a separate leader to manage its venture capital investments. Instead, the Bengaluru-based company has decided to manage the $500 million Innovation Fund with the help of Ritika Suri, who presently heads its Merger & Acquisitions (M&A) initiatives.

“She will be responsible for managing the Innovation Fund as well as our investments in the start-up space, apart from being responsible for M&As. May be at some point of time, we may look at having a person under her to manage the fund. But the person will only report to her,” said a senior official of the company.

In January this year, when the company decided to handover the charge of M&A to Suri after giving the erstwhile M&A head Deepak Padaki the charge of Strategy, it had said that it was looking at having a separate leader to manage the fund.

“Padaki is our head of strategy and while this was just a $100 mn fund that we were not so focused on, he was also managing the fund. But with this becoming a $500 million fund now, we will probably have to find a new leader to run just the fund,” he had said.

Suri joined Infosys last year from SAP where she was closely working with Sikka. Sikka was the head of technology and an executive board member at the German enterprise software maker before assuming the charge of CEO & MD at the Bengaluru-based company in June last year.

Of the $500 million Infosys has earmarked for the Innovation Fund, it has set aside half of the fund for working with young Indian companies. The company has already made two investments out of the fund including $15 million in a spin-off company of animation studio, DreamWorks Animation. Recently, the company said it had made investment in another company which makes cloud-enabled devices for detecting air quality. However, it is yet to disclose the quantum of the investment and the name of the company.

Infosys has identified certain areas like artificial intelligence, automation, Internet of Things (IoT), big data and analytics as its focus areas for engagements in the start-up world.

“The great IT needs of the world are increasingly being served thousands of smaller companies. Yet, bigger businesses not quite trust the small companies. We see ourselves playing an important role – first of all by investing in those start-ups and participating in their financial success and also in helping bridge the gap between the start-ups and the large businesses, give the businesses comfort, the resilience and maturity,” Sikka had said addressing a recent conference by Morgan Stanley, earlier this month.

With Suri as the head of M&A, Infosys has already shown its intent to play an aggressive inorganic growth strategy. Last month, the company had acquired an Israeli-origin automation technology company Panaya for $200 million (about Rs 1,244 crore).