PrivateEquityOnline.com

October 17, 2006

US ‘venture buyout’ fund expands to India

Endowment favourite Garnett & Helfrich plans to open an office in Mumbai and has invested in a mobile operations company with clients across India.

Garnett & Helfrich Capital, a Menlo Park, California-based private equity firm specializing in mid-sized technology venture buyouts, will open an office in Mumbai in 2007. The firm intends this expansion to India to support its companies in the region and to work on new targets for its fund. The Mumbai office will be the firm’s first one located outside the US.

The firm has also obtained a controlling stake in Celunite, a provider of Linux-based open source mobile technology software, for an undisclosed amount. Celunite, based in Sunnyvale, California, has development offices in Pune and Hyderabad, two cities in India.

“India is a hub of technology innovation and talent, thus it is critical that we continue to expand our portfolio companies’ presence in the region by helping them build new partnerships, recruit local talent, and identify and evaluate acquisition targets,” said Terry Garnett, Garnett & Helfrich Capital’s co-founder and managing director, in a press statement. “We will also leverage our Mumbai-based operations to identify new investments in leading technology sectors such as open source mobile platforms like Celunite.”

Garnett also commented on what made Celunite an attractive investment for the firm. “We found Celunite’s business model compelling as it demonstrates that this is yet another arena where open source software is considered a viable alternative to the more costly and limited proprietary alternatives.”

Founded in 2004 by Terry Garnett and David Helfrich, Garnett & Helfrich Capital has a history of investing in companies that have interests in India. It first invested $35 million in Wyse Technology, a California-based leader in “thin-client” computing that has a research and engineering team located in Bangalore, last year. The firm also has invested in Ingres Corp., a provider of open source databases. Ingres Corp. has plans to open offices in India to support its existing clients in Indian industries ranging from manufacturing to government.

Garnett & Helfrich Capital raised $250 million for its debut private equity fund in April of 2004. Its initial limited partners included a number of universities such as Harvard Management Company, Stanford Management, University of Michigan and Columbia University. In September 2005, the firm raised another $100 million for that fund.

Garnett & Helfrich is “exactly the kind of new fund managers that we want to back and put in business,” said Peter Dolan, director of private equity at Harvard, in a 2004 statement. “Garnett & Helfrich Capital can be built into a franchise fund addressing a newly emerging investment category, venture buyouts.” Garnett was a general partner at New York venture capital firm Venrock Associates from 1995 to 2003. Helfrich was an early investor in ComVentures, a communications venture fund.