A company that my brother cofounded just got acquired for around $50 million in cash. It had 40 employees and found a use for some cool technology that they developed in providing a Zero Touch Fraud detection solution. This year revenues were around $3-$4 million and next year may touch $10 million. I think they started the company in 2003. It took them 3-4 years to get to $50 million.
The reason I posted this was to get Indian product entrepreneurs thinking.
Are there some Indian product examples similar to this ? Are there any barriers that prevent Indian entrepreneurs in doing a 40 turns 50 in 4. ? I am sure there are quite a few barriers but Indian ingenuity is supposed to get past them. Right ?
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Rajan,
I read Sujai’s post and left a comment. I agree with Sujai that for Infosys products will be a marginal activity if at all. It is a DNA thing. It is hard to make a gazelle from a gorilla.
Cheers
Sanjay
Thought the readers interested in this post would find Sujai’s post http://windia.blogspot.com/2006/07/why-infosys-cant-be-product-making.html
very useful.
Sumant,
I think you miss the picture. If there is reference to earnings dilution, then one can safely presume the acquisition is partly funded by stock, if not in full ( No.of outstanding shares increases leading to distribution of profits across larger no. of shares ).
Depreciation effect comes since the company is only 4 years young and hence developmental costs would have been capitalised. This would result in higher unabsorbed depreciation available for setoff in future years against profits of ENTRUST, leading to significant tax savings.
Guess you are one now.
Best,
Krish
I know of a consumer technology company that is working on a product that promises to bring tremendous value to the consumer at disruputive pricing. Don’t know if it will be acquired for USD 50 million or not, but I would be happy if it can enable people’s lives as it promises to do…Yes, they will manufacture in India.