Wipro pumps in funds to grow in-house startups
Even as Rishad Premji spearheads Wipro's $100-million corporate venture arm that invests in startups, the central strategy office under him also functions like an in-house venture capitalist that fund ideas from within the company.
The strategy office runs what it calls the H2H3 (Horizon 2, Horizon 3) investment Program to nurture ideas coming from various business units that have the potential to scale up over a two- or three-year timeframe and generate substantial revenues.
The move is an encouragement for employees who think up such ideas, as also potentially a booster for the company given the need to differentiate itself from rivals.
Recently, the program funded the idea of a commodities trading and risk management (CTRM) platform that has the goal to grow to a $50-million practice in three years. CTRM is expected to drive growth across the banking and energy and utilities verticals. Bangalore startup Eka Software has a very successful commodities platform.
Other H2H3-funded practices are in the areas of mobility, cloud and analytics. Wipro said it could not comment on the program. The H2H3 program identifies ideas in solution creation, white spaces, product-led services, new lines of business and new geographic penetration.
The program is said to have not only invigorated business unit team leaders to come up with proposals that have the potential to generate a revenue upside, but also compete internally to receive mentoring and funding support.
By the end of 2012 fiscal, 28 ideas were rolled back into the business units out of which 9 ideas generated revenues. A performance-management solution was one of the successful ideas; it used analytics to predict outcomes for data sourced from insurance companies.
Sources said the solution brought revenues of $0.75 million in the first year of incubation. By the third year, it recorded $33 million in revenues and was rolled back into the BFSI unit.
Another approved idea was in information lifecycle management initiated by the business application services unit. Though it didn't show revenue opportunity in the first year, it generated over $6 million in revenues in the second year and grew to $35 million and $45 million respectively in the third and fourth years. A smart grid solution, part of the energy and utilities practice, touched over $17 million in revenues in three years.
Some ideas are killed if they don't bring expected revenues within a certain period. Among abandoned ventures have been one solution in airline revenue enhancement and another in logistics optimization.