In August last year, Terry Gou, chairman of Foxconn Technology Group, announced that the world’s largest electronics contract manufacturing company was in the final stages of investing in New Delhi-based refurbished goods seller GreenDust. The deal, estimated at $65-70 million ( Rs 430-460 crore), would have been the Taiwanese manufacturer’s second-largest investment in an Indian startup, next to its $200-million investment in online marketplace Snapdeal. But 10 months since, the GreenDust deal is yet to be closed.
The maker of iPhones for Apple has invested in a mere four startups here since announcing ambitious plans for India more than a year ago, adding to domestic funding woes. “It seems that investing in India’s startup ecosystem has slipped down Foxconn’s pecking order,” said an investment banker who had advised multiple startups in their negotiations with the Taiwanese firm. “(Foxconn) had met dozens of startups (in India) over the past 12 months and not much seems to have been done since then,” this person said, requesting anonymity.
Foxconn did not reply to an email from ET, seeking comment about its startup-focused investment plans for India. Apart from its investment in Snapdeal, Foxconn participated in a $9-million funding round in QikPod and invested undisclosed amounts in home automation startup eGlu and mobile internet venture MoMagic. These, however, are a far cry from the firm’s intention of investing $1 billion in Indian startups. In its core area of electronics manufacturing, though, Foxconn has announced plans to develop 10-12 factories and data centres in India by 2020.
Hitendra Chaturvedi, chief executive of GreenDust, declined to comment on the proposed Foxconn deal, but said, “We have a high-growth, profitable business model and, therefore, having incoming investor interest is not uncommon.” In June last year, ET had reported that over a dozen Indian startups met Wen-Hsin (Vincent) Tong, chairman and director of investments at FIH Mobile Limited, an investment arm of Foxconn, at the New Delhi office of Snapdeal “The advantages of having a strategic investor on board are that it’s a great acknowledgement of the value of the business and a testament to what is being built.
However, a premature announcement has the potential to stop every other conversation,” said Sandeep Murthy, partner at Lightbox. Foxconn’s $3.5-billion takeover of Japanese electronics manufacturer Sharp is cited as a leading reason for the company’s change in strategy, as it struggled to close a transaction that was dogged by last-minute disclosures and stiff competition from other suitors.Also, globally, tech stocks have dragged across major bourses, including on Nasdaq, posting sharp declines since February. Jessie Bates III Authentic JerseyShare This