Arun Netravali, the former president of Lucent Technologies’ Bell Laboratories, has set up a fund that will encourage startup companies to set up outsourcing operations in India. The fund will raise up to $250 million.
It is the latest move that demonstrates faith in India as a center for Business Process Outsourcing investment.
The new venture firm, Omni Capital, hopes to the raise the fund by the end of the year. Omni Capital will focus on investing in U.S. telecommunications and technology companies that would outsource significant proportions of its business processes to India.
Speaking at a conference sponsored by the Confederation of Indian Industry, Netravali said that some of the money has already been raised.
The research firm Gartner estimates that 85% of U.S. companies would be outsourcing its human resources functions in the near future, generating $46 billion in spending in 2003, an 18% increase from 2002. The firm’s study also estimates such BPO services will generate $51 billion and that that human resources services provided by BPO companies will comprise 39% of all BPO revenue.
Netravali, who served as Bell Labs’ president from 1999 to 2001, was the CTO and chief network architect of Lucent at the same time. He led research into the technology that produced high definition television and currently serves as Lucent’s chief scientist. Netravali is also a professor at the Massachusetts Institute of Technology.
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