Ants team up with corporates and entrepreneurs to help them go e, fast.

By Roshni Jayakar

Somewhere in Bangalore's digital topography four ants have been hard at work, 14 hours a day, five days a week, since April, 2000, building an on-line healthcare company. Ants? Healthcare? Has BT gone off the deep-end and become a sci-fi mag? The answers to that succession of questions, in that order, are-yes, yes, and no.

Ants are what employees of Antfactory-a pan-European strategic investment company-like to call themselves. The firm-named after the RAF squadron in which the father of one founder served during WW II-was founded in October, 1999, by six ants; today, it boasts around 140 on its rolls. So, what is this strangely named firm? Angel? Incubator? Or venture capitalist? Rajiv Sahney, the 37-year-old managing director of the company's Indian operations concedes that it is difficult to classify it: ''We are probably a little bit of an angel and a little bit of an incubator.'' Indeed, the company is most comfortable with the definition-'value catalyst for the New Economy'-and mission-'to be the leading value catalyst in the New Economy by enabling established businesses and new ventures to prosper and grow successfully in a rapidly changing new economic environment'-it has chosen for itself.

Seen in the context of these facts, the activities of the ants at Indegene-that's the name the Bangalore-based healthcare company goes by-become clearer. Healthant Nikhil Nath, a venture partner at antfactory is a virtual CEO for Indegene. Along with his three member ant-team, and with some help from a few Europe-based healthants who winged down for a while, Nath has built an organisation-systems and all- around the basic idea of integrating healthcare with the Net developed by two students of medicine, Rajesh Nair and Rohit Bhojraj. Today, Indegene is just a few months away from its next round of funding, and Nath is busy interviewing prospective coos. Says Nair, 30: ''Six months back, when many plain vanilla veecees were willing to give us money, we opted for antfactory because of their ability to add (non-money) value to the company.'' Adds Bhojraj, 30: ''Antfactory helped us by bringing in an international perspective and knowledge of how a real world business could blend with an Internet one.''

And the ants go marching on

Antfactory has a singular objective: building anthills (that is how the firm refers to the New Economy businesses it builds). These anthills could start with the new-e initiatives of brickworld heavyweights, or with individual entrepreneurs who own a compelling idea, but little else. And antfactory's ants serve as architects and contractors for a range of services: from developing a start-up's business strategy to operationalising its business processes.

Antfactory may have been the first, but it faces competition (internationally) from the kpcb venture Bain & Co; Texas Pacific initiative eVolution Global Partners, and the BCG venture General Atlantic, and the Goldman Sachs one, iFormation. India, too, isn't without its clutch of home-grown incubators-cum-venture capitalists. Or venture catalysts. Says Ranu Vora, 28, CEO and Co-founder, Collstartups.com: ''The concept of incubator-veecee is not alien in India. There are those who build up a company from the idea stage and pick up equity stake in return.'' So, what's antfactory's USP?

Why these ants are different

Despite its investment in a start-up like Indegene, antfactory's primary focus-or should one say desired future focus, since the nine names from its 20-company portfolio that it shared with BT are on-line start-ups-as evident from its mission statement, is the on-line diversification of companies with distinct off-line strengths. That is because the firm believes that large brick-and-mortar companies, not pure-play start-ups, will be at the vanguard of the next wave of businesses getting on to the Net. And antfactory believes it has unique competencies that can help it do so (See Helping Offliners By...). Says Sahney: ''In India, we are looking at companies which can make a paradigm shift, and brick-and-mortar ones that will make an impact on the Net.''

A careful look at the company's portfolio indicates that the ants have a weakness for companies that promise to change the rules in industry-segments that are large, fragmented, and inefficient-like healthcare. Sahney admits that the sector, along with transportation, software, and financial services could be areas of interest to the ants in India.

Ants like to work

To indulge in a bit of new-e wordplay with La Fontaine's fable of the ant and the grasshopper, it isn't quite all work and no p(l)ay for the ants. Antfactory has a fund-corpus of $500 million-its investors include Allianz ag, Citibank Venture Capital, and CVC Capital-but since it isn't a veecee firm in the strict sense of the term, it doesn't expect quick returns. Indeed, to date, antfactory has realised returns from just one of its investments: when it sold the bulk of its 31 per cent stake in ace-quote.com, a B2B Infotech-and telecom-portal to DCI, a Bavaria-based e-Commerce conglomerate. Says Sahney: ''As long as a company is growing at a good pace, and continuing to add value we stay invested.''

That kind of faith may be heartening to entrepreneurs, but, in the long run, will the ants make money as the bees make honey? The jury is still out on that one. The ants? They're still hard at work.

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