In a precursor to a possible initial public offering, technology firm Tejas Networks has made a late-stage share placement worth Rs 95 crore with financial investor Goldman Sachs. A top company official said the funds would be used in product development.
The firm is a manufacturer of optical transport equipment and operates in the same space as networking giants Alcatel Lucent, Ericsson and Huawei. One of its largest individual shareholders and co-founders is Gururaj Deshpande, a Silicon Valley serial entrepreneur.
Founded in 2000 by four technology professionals — Sanjay Nayak, Kumar N Sivarajan, Arnob Roy and Mr Deshpande — Tejas has gone through four rounds of venture funding. Its other investors are Mayfield Ventures, Battery Ventures and Intel Capital. The company had raised $49 million before the investment by Goldman Sachs. Financial investors own over 50% in the company.
“Our time to market is shorter and the innovation capital we require for R&D is also much lower. This is our inherent advantage,” Tejas CEO and MD Sanjay Nayak told ET. Currently, the company is ranked as number two in the Indian market, but does not cover the entire spectrum of products in the optical carrier space. In India, it sells under its own brand name and in overseas markets, through OEM tie-ups with global vendors.
The company closed FY07 with Rs 234 crore in revenue and expects to close the current fiscal with Rs 400 crore. Its revenue in FY06 was Rs 128 crore and in FY05 Rs 47 crore. It turned profitable last year.
As of now, most of its revenue comes from the Indian market, and overseas sales account for only 15% of its revenue. However, it entered overseas markets only two years ago and in the next three years, overseas sales are expected to become the largest contributor to its revenue. “Our story is the India theme married to that of being an R&D company,” said Mr Nayak. If its listing happens in India, it would give local investors a rare opportunity to invest in a pure technology firm.
Source: Economic Times