India-origin Entrepreneurs Striking Gold in US

Even as Indians in Silicon Valley are facing the ire of anti-immigrant Americans for usurping their jobs, Indian-origin entrepreneurs are vigorously consolidating their presence, with new multi-million dollar funding or acquisition deals with leading industry players. Firms like Vivek Ramaswamy’s Roivant Sciences that raised $1.1 billion from SoftBank and Springpath, which is being bought by Cisco for $320 million, are putting to test the long-held perception about ‘American owners, Indian employees’.

Since the 1980s, when Indian startup founders and leaders in the US were a rare community, things have come a long way. In the recent months, many Indian-origin entrepreneurs have attracted investor interest.

Cisco’s announcement earlier this week about its plans to acquire Springpath, which was founded by Mallik Mahalingam and Krishna Yadappanavar in 2012, is the latest in a string up of such deals that have taken place in the last few months.

Singapore-based chipmaker Broadcom’s plans to buy California-based technology company Brocade, founded in 1995 by Mysore-born Kumar Malavalli, for $5.5 billion was conditionally approved by China’s commerce ministry on August 23. The deal already has won approval in the US, Europe and Japan.

Another huge deal took the tech world by storm earlier this year, when Cisco acquired application intelligence venture AppDynamics, started by IIT Delhi alumnus Jyoti Bansal, for $3.7 billion. The deal remains one of the largest acquisitions made by the US-based technology firm. Bansal was said to own 14 per cent of the company, since he had diluted his stake to many venture funds, and was estimated to get about $520 million from the deal. The 38-year-old entrepreneur was, however, still dreaming big after clinching the deal. “Too young to retire,” he told the Economic Times following the announcement.

In March this year, Hewlett Packard Enterprise announced plans to buy the flash storage company Nimble Storage for about $1 billion. Nimble was founded in 2008 by Varun Mehta and Umesh Maheshwari. Mehta is an alumnus of the Birla Institute of Technology and Science, Pilani, while Maheshwari studied BTech in computer science from IIT Delhi, where he received the President’s Gold Medal as the top graduating student, and holds a PhD in computer science from MIT.

Biotech and health startups with Indians at the helm of affairs are coming in the spotlight too. Vivek Ramaswamy’s Roivant Sciences is not the only case in point. Chicago-based health-tech company Outcome Health, founded by Indian-American entrepreneurs Rishi Shah and Shradha Agarwal, raised $500 million at a valuation of $5.5 billion in May this year. Shah and Agarwal were also named in Fortune’s ‘40 under 40’ list of influential young people earlier this month.

These deals only serve to underscore the trend that was gathering momentum in the last few years. Since 2012, about 25 Indian-founded companies have seen mergers and acquisitions worth more than $500 million, according to Quartz reported, citing a report by Manu Rekhi, director of venture capital firm Inventus Capital Partners. On top of the list is the $19 billion-worth Western Digital’s acquisition of SanDisk, the flash drive manufacturer co-founded by Delhi boy Sanjay Mehrotra.

The Unicorn Club, comprising companies valued at more than $1 billion, is also increasingly seeing names of Indian-founded companies. India tops the list of immigrant founders who have started billion dollar companies in the US, according to a study done by National Foundation for American Policy , a US-based non-profit non-partisan public policy think tank, in 2016. It named 14 Indian-origin entrepreneurs behind billion dollar companies, collectively valued at $19.6 billion, in the country.

“At Google alone, 40% of the engineers are Indians,” a senior executive at Google’s headquarters in Mountain View, California, said, according to the Economic Times, “it’s common for quite a few of them to set out and start ventures on their own.”

The success of Indian entrepreneurs in the US is rooted to a large extent in the fact that a generation of Indians has been brought up in a culture that values humility, family relations and respect for people in all areas, the Los Angeles Times had reported earlier, citing cultural experts and Indian executives. “The second generation has the best of both worlds,” it quoted Professor Vivek Wadhwa, who teaches at Stanford and Duke universities and has studied Indian American entrepreneurs, as saying. “They have my values yet all the American advantages. They can achieve the same as my generation at much younger age.”

Looks like they are doing  just that.