BUSINESS
01/08/2019 9:34 AM IST

How VG Siddhartha Helped Infosys Take Off In 1993

Coffee, cafes and computers: Karnataka's new-age entrepreneurial journey

Shailesh Andrade / Reuters

Cafe Coffee Day started brewing coffee in Bengaluru in the mid-90s, offering a cuppa to busy techies, youngsters and aspiring entrepreneurs who would throng the Brigade Road outlet brainstorming over the next big idea.

It was around this time that the city was fast emerging as the Silicon Valley of India, wooing tech companies from around the world with its great talent pool, investor-friendly policies and pleasant weather.

Of the thousands of entrepreneurial stories scripted in Karnataka, one of the most distinctive ones has been that of Cafe Coffee Day founder VG Siddhartha.

Born to a coffee grower, Siddhartha expanded his empire from a single outlet to a thriving network of 1,750 cafes across more than 200 cities, including international locations like Prague, Vienna and Kuala Lumpur.

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The son-in-law of former Karnataka chief minister SM Krishna, Siddhartha also recognised the opportunity in the Indian tech space early on.

Through Sivan Securities, he underwrote Infosys’ IPO in 1993 when the issue was under-subscribed. Infosys is now India’s second largest software services company.

Infosys co-founder Nandan Nilekani would later invest in Coffee Day Enterprises when it went public.

Later on, Siddhartha invested in more IT companies ― Ivega Corp and Kshema Technologies. In 1999, he bet on Bengaluru-based Mindtree ― an investment that he finally cashed out on earlier this year with over Rs 3,000 crore in his kitty amid a high-voltage takeover by L&T.

Siddhartha’s death leaves entrepreneurs in shock

Many would believe that Siddhartha’s journey has been truly inspirational. However, in a purported letter written by him to the CCD board, Siddhartha said he had failed as an entrepreneur. The letter indicated that he was anxious about pressure from banks, investors and the tax authorities.

Siddhartha had gone missing since Monday evening, and his body was found on Wednesday in the Netravati river in Dakshina Kannada district of Karnataka after 36 hours of intense search.

The entrepreneurial hub continues to be in a state of shock over the incident.

Flipkart co-founder Sachin Bansal tweeted: “I had known #VGSiddhartha personally and was always amazed at his energy and positivity” as he described Siddharta as an inspiring entrepreneur and investor.

GOQii founder Vishal Gondal expressed condolence, tweeting: “Mistakes are always forgivable, if one has the courage to admit them. A lot can Happen Over Coffee. Keep Shining sir!”, while Paytm founder Vijay Shekhar Sharma said he was saddened beyond words.

Bengaluru has witnessed the highs and lows of many entrepreneurial journeys.

CCD’s original Brigade Road outlet has since shut down, edged out by swankier coffee shops that have mushroomed in the neighbourhood.

Siddhartha’s legacy will, however, remain an integral part of CCD outlets where aspiring startups even today make their pitches to potential investors ― in the hope that “a lot can happen over coffee”.

 

 

The IT hub in Karnataka

While Gujarat and Maharashtra were known for their brick-and-mortar industrial empires, Karnataka was developing into a hub of innovation-driven companies like biotech major Biocon.

The 1980s saw the likes of Infosys and other tech companies setting up base in Karnataka. In the years that followed, global digital giants like IBM, Cisco, Intel and Amazon made a beeline for India, choosing Bengaluru as their base camp.

As per estimates, Karnataka continues to be the centre of investor interest ― it attracted the maximum amount of investment proposals for the first three quarters of 2018, ahead of Gujarat and Maharashtra that aggressively position themselves as investment destinations.

According to available statistics, Karnataka received investment proposals worth Rs 88,493 crore in 2018 (till November), Rs 1,52,118 crore in 2017 and Rs 1,54,173 crore in 2016.

Karnataka has been on the forefront of India’s startup boom, hosting now household names like Flipkart and Ola. These new-age firms have gone on to become celebrated unicorns and helped India earn the distinction of being the world’s third largest startup ecosystem.