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VC firm turning to Asia for new investments

Worldview Technology Partners hopes to invest about $500 million in start-ups worldwide, including in Asia, during the next two to three years.

SINGAPORE--Venture capitalist firm Worldview Technology Partners hopes to invest about $500 million in start-ups worldwide, including in Asia, during the next two to three years.

According to the Palo Alto, Calif.-based firm's partnership director, David Suzuki, it would be investing in companies that provide communications and Internet infrastructure technologies, with a special focus on the telecommunications sector.

"We are investing in the new next-generation technologies area, which has strong growth potential over the next three to five years," he said. That includes Voice over Internet Protocol, storage and optical networking.

Suzuki was speaking to CNET here at CommunicAsia 2001, one of Asia's premier telecommunications and IT events. Organized by Singapore Exhibition Services, the show runs from June 19 to 22 at the Singapore Expo.

Suzuki said Worldview is looking at a short list of 15 to 20 companies in the United States, out of which it might invest in one or two. He added that it also tracks a list of about 200 to 300 companies as potential investments.

Worldview Technology Asia managing director Terence Tan did not provide a breakdown of the company's investment plans in the United States or in Asia. "Where all these funds will be deployed depends on opportunities that fit into our investment criteria. We're not really carving out a specific amount per market," he said.

Without revealing details, Tan said the firm spends its time talking to telecom companies in Asia to see if there are new technologies that could benefit them and create new services for them to get new sources of revenue.

In Asia, the countries in which it plans to invest include Korea, Hong Kong, Singapore, China and Taiwan.

Worldview mainly invests in U.S. companies, but Suzuki said it has so far invested "between $50 million and $100 million" in Asia. With its offices in Singapore and Tokyo, it hopes to invest in companies in the region "when we feel that the opportunity in Asia and the return-to-risk profile looks similar to what we see in the United States," he said.

Worldview has 25 employees in its U.S., Singapore and Tokyo offices, Suzuki noted.

Suzuki said the firm has managed to raise a total of about $1.75 billion in four different funds since 1996. He added that it has so far used up about $750 million of its managed funds.

In telecommunications, it invests in components, equipment, services and Internet infrastructure software, he said.

"We are beginning to see legacy networks actually being upgraded to data networks or Internet Protocol networks," Suzuki said. "That's where there is a huge opportunity in telecommunication investment--(to) enable service providers to offer new services which consumers want to buy very quickly."

It has more than 80 companies under its portfolio, including U.S.-based optical equipment makers Corvis and Ciena, graphic chips maker Nvidia, and optical switch maker Tellium. In Asia, it has invested in Chiga in Japan, CommVerge Solutions in Hong Kong, eGlobal Technologies in Singapore and iWorld in Korea. Suzuki, however, declined to say how much was invested in each of the companies.

Another company that has benefited from Worldview's investment is U.S.-based Ensim, which provides software that helps Internet service providers, hosting providers and Internet data center operators automate the management and deployment of hosted services.

According to Ensim Vice President of Business Development Sandip Gupta, the company closed $64 million in funding from Worldview in its third round of funding. The funding will be used for new product development and rollouts, growing its operations and increasing headcount.

"By getting the funding, it shows that investors were looking for companies that they think will influence the growth and profitability of a service provider," he said. "Worldview was looking for good technology, a strong management team and a huge market potential, which we possess," he added. Gupta was speaking at the sidelines of the conference Tuesday.

He noted that Worldview helped Ensim in its business development, in customer acquisitions and to introduce partners that are complementary to Ensim's business.

On return from investments, Suzuki said Worldview typically looks at four to six years as a time frame.

When asked if he saw venture capitalists closing down or losing money because of the poor return from investments, Suzuki said: "In the United States, you are going to see venture capitalists start to struggle to raise their second fund in the next 18 months. There is just not enough support in the fund-raising to invest in venture capitalists' funds."

CNET's Anand Menon reported from Singapore.