India's second-largest software exporter is also finalizing an agreement to sign up for software products think-tank iSpirt's mergers and acquisitions program to connect with early-stage product companies, these people said, all requesting anonymity.
Infosys's push towards tapping the startup ecosystem comes at a time when some of Indian IT's largest customers are undergoing massive technology transformations as they are being disrupted by new-age companies such as Amazon and Facebook. Customers are, therefore, increasingly asking for non-traditional technology solutions to solve new-age business problems.
"Infosys is mostly looking to evaluate startups that focus on areas such as decision science and artificial intelligence, most of the startups Infosys wants to look at have an India-for-global focus," said one of the people directly familiar with the discussions.
With analytics and artificial intelligence being key focus areas for Infosys, the company is evaluating startups that have a profile similar to that of enterprise software maker SirionLabs, for example. SirionLabs develops technology aimed at improving the efficiency of outsourcing contracts, the people mentioned above said.
"The discussions are still at a very early stage," the person quoted above said. "Most of the startups that companies like Infosys are looking to tap are incorporated in India, with their founders based out of the Silicon Valley."
Yusuf Bashir, newly-appointed head of Infosys's $500-million startup fund, visited Bengaluru in April to meet members of iSpirt's M&A team and evaluate how to best tap into India's software product ecosystem. iSpirt executives also met Kaustav Mitra, vice-president, innovation ecosystems at Infosys. Like Bashir, Mitra too was a former colleague of Infosys chief executive Vishal Sikka at SAP.
iSpirt's M&A connect program has a curated list of nearly 100 early-stage software companies under a business exchange program that typically connects large enterprises such as IBM and SAP with early-stage startups that are building disruptive software solutions. Companies like IBM, SAP, Intel, Microsoft, Amazon, Google, Flipkart and Salesforce are members.
In January, Infosys expanded the size and scope of its startup fund by five times to $500 million. Later, Sikka pledged to invest $250 million in Indian startups in the first such commitment by a cashrich software services company.
In April, Infosys also set up a corporate accelerator program to incubate startups. As part of its push towards tapping the Silicon Valley ecosystem, Infosys has also significantly beefed up its Palo Alto headquarters with hires such as Mitra and Bashir.
Infosys did not respond immediately to an email seeking comment. "We can't comment on specific engagements," said Sanat Rao, who leads iSpirt's M&A connect program. "Both Indian and global corporations rely on our M&A Connect program to discover high-quality India startups for Alliances, investments and M&A."
ET reported in March that Infosys had discussions with about two dozen venture capital firms, including Andreessen Horowitz, for investments in startups in the Silicon Valley. Since Sikka took over last year, Infosys has invested in two startups -- a DreamWorks Animation spinoff and air purification technology startup AirViz.
"The startups that Infosys has connected with typically have been founded over the past 2-3 years -- most of them are in the B2B (business to business) space," a second person aware of the developments said. "Infosys is also looking to invest in or acquire startups that typically build algorithms that can do predictive analytics, for example, an analytics product that can predict what users of a large retail customer like JC Penney are looking for," this person said.
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