A presentation at Stockholm at an ICT event

1. © 2006 Shantanu BhagwatNot to be distributed without prior consent © 2006 Shantanu Bhagwat
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

2. 3
Not to be distributed without prior consent © 2006 Shantanu Bhagwat
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”?

3. 4
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 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
* At least…
3* reasons for thinking about Asia

4. 5
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World’s largest market opportunity?

5. 6
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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 ’03 ~ 2k new subs/ month
India - at an Inflection Point…
Apr ’04 ~ 2m new subs/ month

6. 7
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India - at an Inflection Point…

7. 8
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* Source: WSTS, IC Insights, Walden International Presentation
Asia – Driver of global growth
Global Semiconductor Sales…

8. 9
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Source: http://www.ibef.org/artdisplay.aspx?cat_id=135&art_id=2600
Consumer Markets in Asia

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

10. 11
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* Data does not include buyouts or PIPE transactions;
** Source & Copyright: Ernst & Young/VentureOne, except B (Thomson MacDonald), E (TSJ Media), and F (Zero2IPO)
Global VC flows

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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

12. 13
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Whither Europe?
 Asia: an after-thought vs. a strategy
 Traditional conservatism
 Lack of awareness
 Lack of “cultural bridges”
 Demographics
 But things are changing…

13. 14
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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

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More on “Why Asia? Why now?”
 Why Venture Capital has to globalise:
http://global-themes.com/why-vcs-have-to-globalize/
 The VC Stampede to Asia
http://global-themes.com/vc-stampede-to-asia/
 India, China, Outsourcing and Globalization
http://global-themes.com/india-china-outsourcing-
globalization/
 The case for International VC Firms http://global-
themes.com/the-case-for-international-vc-firms/

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Thank you!
More on www.global-themes.com
Email: sbhagwat@amadeuscapital.com
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
Questions, Comments?