In 1993, when Infosys launched its initial public offer, the issue was undersubscribed.
Coffee Day founder VG Siddhartha and Vallabh Bhansali of Enam Securities underwrote the offer to make the issue successful on what could turn out as India’s second-largest software company. While Infosys went on to produce high returns to shareholders, Siddhartha sold his stake much earlier.
He also developed a bond with Infosys cofounder Nandan Nilekani, whom he called “elder brother”, for his interest in technology. Nilekani, in turn, invested in Coffee Day Enterprises, when it went public.
Siddhartha is also among India’s first venture capital investors, who with Global Technology Ventures bet on founders who built technology companies. In 1999, he made three investments — Ivega Corp, Kshema technologies, Mindtree — betting on its founders to build businesses that he would eventually sell. While Ivega was sold for $5 million, Kshema got him higher returns when Mphasis bought the company for $21 million.
“Ivega technically was started in Coffee Day on Brigade Road due to the internet there. He was curious that a bunch of youngsters were using its internet. I got introduced to him there. He invested Rs 10 crore in Ivega,” said Giri Devanur, founder of Ivega, which eventually was sold to TCG Soft. “The discussions were done verbally on a Friday, we got the money on Monday before even the termsheet was signed.”
However, Siddhartha’s biggest bet was Mindtree. When he exited the company after two decades, he earned a profit of over Rs 2,850 crore from his 20.31% stake.
Siddhartha also set up India’s first cyber cafe at its Brigade Road coffee day outlet, a model that eventually caught up across the country and helped spread access to the internet.
Devanur, now vice-chairman of Gallop.ai, a US technology company, was to meet Siddhartha in Bengaluru on Tuesday. “Siddhartha was a believer in technology. During my last meeting in New York, we discussed on impact of AI, machine learning and how it will impact businesses,” he said.
Siddhartha is known as a patient investor, who would give founders the freedom to build a lasting company.