Asia ICT Presentation, Stockholm

Asia – Why and why now? Shantanu Bhagwat The contents of this presentation and the opinions expressed therein (unless stated otherwise), are the intellectual property of Shantanu Bhagwat and should not be used, quoted, transmitted or distributed in any form or manner, without the explicit and written consent of the author. © Shantanu Bhagwat, 2007 Email: shantanu20ATgmail.com

A lot of people seem to be unaware of developments in Asia; others believe that they have no impact

European VCs have also tended to be very cautious re. Asia and helping their portfolio cos. get in the region (contrast w/ Silicon Valley where anecdotal evidence suggests that a deal is unlikely to get funded if it does not have a China or India angle)

Today I would like to share with you my views on what is happening in Asia and why should we be paying attention?

AND Why is Asia relevant? From a VC perspective?

Finally, I will spend a few minutes on what we (Amadeus) are doing in Asia? And how are we adding value…

Its not about Asia, its about growth..

Its not about costs; it is about revenues

… not about the “threat”, but the opportunities

… not a “ whether ” or an “ if ” but a “ what ” and a “ how ”?

Markets

200m ~ 300m “middle-class” in India

Similar-sized (although less conspicuous) in China

400m+ mobile subscribers in China

100m+ in India and still growing at > 50% year-on-year

Innovation

Areas of core tech innovation are emerging

Increasing number of US VCs are building trans-pacific or US-India teams to leverage the potential

Migration of technology sectors

TVs

Semiconductors/ Consumer Electronics

3* reasons for thinking about Asia * At least…

World’s largest market opportunity?

Apr ’03 ~ 2k new subs/ month

India - at an Inflection Point… Source: Nokia, “New Horizons”, Q2 ’05 http://sifybroadband.techwhack.com/category/hutch/ New Additions in Apr ’06: 3.9m (5.1m including CDMA); By Dec ’06, total additions were touching 6m+; 85% CAGR (’04 – ’07)

Apr ’04 ~ 2m new subs/ month

India - at an Inflection Point…

Asia – Driver of global growth * Source: WSTS, IC Insights, Walden International Presentation Global Semiconductor Sales…

Consumer Markets in Asia Source: http://www.ibef.org/artdisplay.aspx?cat_id=135&art_id=2600

Emerging Hotbeds of Innovation* * Map http://www.bugbog.com/maps/asia/asia_map.html may not be to scale Source: Prof. Phil Anderson, INSEAD; Beijing (Telecom, IT) Shanghai (Bio-medicine, IC Design) Songdo (RFID, New Media) Pune (Software)

Global VC flows * Data does not include buyouts or PIPE transactions; ** Source & Copyright: Ernst & Young/VentureOne, except B (Thomson MacDonald), E (TSJ Media), and F (Zero2IPO)

VC Activity in Asia (sample) Jan* 2005 2006 Apr Jul Oct Jan Apr Jul Oct Jun: Sofinnova to invest up to 15% of its fund in Asia Oct: TVM announces it may invest in Asia from future funds; Cisco earmarks $100m for VC investments in India Jul: IDG-Accel launches new fund for China Aug: Mayfield Partners with GSR Ventures; NEA moves in China; opens office; Sequoia adds team in China Nov: Sierra Ventures partners with Gobi Partners; Kleiner Perkins enters China Jan: Intel Capital announces $250m “India Fund” Mar: NVP announces intention to do 5-6 investments May: Sequoia announces $150m India Fund Jun: IDG announces dedicated Indian Fund; Canaan Partners begins investing in India Jul: DCM says it will invest between 25% - 35% of its new fund (DCM V) in China and Japan (and possibly India); Matrix closes a $150m fund for India Not tracked during this period or prior to Jan ‘05

Whither Europe?

Asia: an after-thought vs. a strategy

Traditional conservatism

Lack of awareness

Lack of “cultural bridges”

Demographics

But things are changing…

Amadeus portfolio cos. in Asia** … and many others * Map http:// www.bugbog.com/maps/asia/asia_map.html may not be to scale; ** List of companies is a sample and not exhaustive