News Hour- Cisco buys into media start-up Qyuki founded by Shekhar Kapur and AR Rahman

      A.R. Rahman  |  Shekhar Kapur    

BANGALORE/CHENNAI: Cisco Systems, one of the world's largest technology companies, has bought a stake in a digital media start-up floated by two of the biggest names in the global entertainment business -Shekhar Kapur and AR Rahman. Cisco's investment of Rs 27 crore in Qyuki, founded by Oscar award-nominee Kapur, gives it a 17% holding in the creative social media platform that is expected to go live in May. 
Qyuki, which was set up last year, will allow the co-creation of creative content. For example, lyrics could be posted by one user, another could score the music and a third could be a publisher who packages it and takes it to market. The technology platform will itself be built in such a way that the content can be distributed through any device. 

"Qyuki will not be as inert as Facebook or as passive as You-Tube. We want to shepherd people's creativity to create new films and score music collaboratively," said Kapur, who conceived the idea two years ago. Rahman, winner of both the Grammy and Oscar, is travelling abroad and could not be contacted. 

For Cisco, this deal points to a renewed interest in the Indian startup ecosystem, where it plans to invest up to $60 million (Rs 300 crore) a year starting from 2012. "We invest to learn," said Joydeep Bose, Cisco's MD for investments and acquisitions (Asia-Pacific and Japan, excluding China). 

CISCO THE ONLY VENTURE INVESTOR 

Sluggish growth in its core business of networking pushed Cisco, which underwent largescale restructuring, to explore new sources of innovative technology and find new users for existing technology. In 2011, it posted revenues of $43 billion. Investing in new innovative ventures helps the technology giant attune its eyes and ears to breakthrough developments on the ground. "Software tools, cloud computing, analytics and low-cost innovation for emerging markets are areas we focus on," said Bose, whose team invests between $2 million and $20 million in new ventures in these sectors. For Kapur, a former management consultant, it was a chance encounter with a Cisco team at a workshop in the US that helped transform a nebulous idea into a technologybacked venture. In June last year, he roped in music maestro Rahman as an investor with a 4.5% stake in the start-up. Kapur, 66, owns close to threefourths of the company. 

Cisco is the only venture investor in Qyuki, which has been valued at around Rs 160 crore on the strength of an idea alone. "Imagine the ecosystem of a rainforest, where you don't know which root belongs to which tree; we have created an open platform where people can come in and fasten themselves on the technology trunk, become better than us and take our sun," said Kapur, whose previous entrepreneurial venture was Liquid Comics, a comic book company he co-founded with Richard Branson of the Virgin group and new-age spiritual guru Deepak Chopra. 

While Cisco's investment in Qyuki reflects its interest in seeding technologies for the future, it is also backing other funds investing in ventures that foster low-cost innovation. In late 2011, it participated in the first closing of $63 million in Aavishkaar Venture II, a fund focused on rural India. 

The fund aims to raise nearly double this sum. "Cisco is looking at rural transformation as a critical area of interest and some of our companies are working with them to see how technology can be used to deliver better efficiency to the people," said Aavishkaar founder Vineet Rai, whose new fund will focus on education and healthcare. 

For Cisco, which invests for strategic corporate gains along with financial returns, investments in Qyuki and Aavishkaar are designed to push its agenda of expanding the reach of technology across the world.
(Source- http://economictimes.indiatimes.com)