Intel's top corporate venturing executive echoes other concerns voiced this year about how the US is losing its dominance as the first equity market of choice for fast-growing young companies.
Arvind Sodhani, US-based chip-maker Intel’s corporate venture unit’s president, yesterday outlined why Intel Capital has found flotations easier in the US than in Asia, as the company hosted at its twelfth annual Intel Global Capital Summit in Huntington Beach, California.
Sodhani said five of Intel Capital’s six initial public offerings this year had come in Asia, because it is possible to go to initial public offering in Asia, "sooner and at lower levels of revenue than in the US".
The five Intel Capital-backed companies to list in Asia this year were Chinese companies SkyMedi, Phoenix New Media, BCD Semiconductor, Parade Technologies, as well as Taiwan’s Gudeng Precision Industrial. Intel also listed Wind Mobile in Poland last month.
Sodhani is the latest top executive to voice a lack of confidence in the US IPO market.
US trade body the National Venture Capital Association published recommendations last month that provided recommendations to help improve the US IPO market. While Advanced Technology Ventures’ Michael Carusi told news provider Xconomy in September US-based healthcare company GI Dynamics in Australia, because "the US IPO market was closed."
The concerns about the US equity markets exit environment have come despite large flotations this year typified by US-based daily deals website Groupon, the second largest internet initial public offering in history, after US search engine Google’s flotation, and that of US social networking company LinkedIn, among others.
Sodhani also said during Intel Capital’s summit the company has invested $472m this year, in 72 deals, and 47% of these investments were outside the US. Sodhani also announced ten new investments in Asian companies worth $40m yesterday. The company also announced yesterday it was leading an eleventh Asian investment of $40m investment in Indian fashion website Fashion and You, alongside venture firm Norwest Venture Partners. Corporate venturing unit Nokia Growth Partners and Sequoia Capital also participated in the Fashion and You deal.
The other 10 Asian investments were in: Japan-based cloud internet company G-Cluster, India-based cloud internet company Happiest Minds Technologies, China-based business to business search engine Makepolo.com, Shanghai-based smart grid product company Miartech, Korea-based semiconductor product testing company Neosem, Japan-based mobile media company OneBe, Hong Kong-based security software company OutBlaze Venture Holdings, India-based mobile software company TeliBrahma Convergent Communications (which raised $5m from Intel Capital, Inventus Capital Partners and Ojas Venture Partners), as well as uncompleted investments in India-based mobile software company Insyde Software Corporation, and Taiwan-based social company Snsplus.
The company has had 31 exits this year including its initial public offerings. Marcos Battisti, managing director of Western Europe and Israel at Intel Capital, said it has invested $100m in Western Europe this year.
Battisti added the company is de-prioritising investment in the UK, which has slipped from being the corporate venturers most important market historically to its third most important market.
Battisti said France was now the most important, followed by Israel. He added, after the UK the firm is also interested in Germany, the Netherlands and Scandinavia, which each attract a similar level of its focus.
Sodhani also announced that the International Finance Corporation, an investment arm of the World Bank, has joined Intel Capital as a syndicate partner.
With additional reporting by Toby Lewis
