sincerely believe he has a brilliant future behind him.'' The Bangalore-based
venture capitalist who has this to say about serial entrepreneur
Pradeep Kar-him of Microland, Planetasia, ITspace, and Indya.com
fame-goes on to indicate his preference for anonymity referring
to a nugget of wisdom gleaned from the Panchatantra: ''Never publicly
defame a once commended name''. And Pradeep Kar was, and is, a commended
Even the little criticism he attracts is tempered.
One reason for that could be that Kar, who founded Microland in
1989 with capital provided by sbi Capital, is a professional who
made it big: his family moved from Kashmir to Mumbai in 1961 in
search of better things. His father found a job in Tata Electric
(now part of Tata Power) and rose up the ranks, but Kar was always
keen on doing his own thing.
Says Prashanth Prakash, CEO of Netkraft, a
Planetasia rival, ''Kar is able to spot an opportunity, hire the
right people, and somehow obtain funds to run the operations. Of
course, it is a different story when it comes to execution.'' Adds
Avinash Vashishta, CEO, neoIT, a Bangalore-based tech company, ''Undoubtedly,
Kar has been able to spot certain trends in the industry. Whether
they were the right trends to pursue is a different matter.''
Khosla, General Partner,
Kleiner Perkins Caufield & Byers.
Kar is reported to have met with Khosla during his stint in
the US. TiE (The Indus Entrepreneurs) meetings helped nurture
Invested in Indya.com
Sculley, Partner, Sculley Bros.
Kar met the former Pepsi and Apple exec at one of the WEF
dos in the 1990s
Invested in Indya.com
Dalal, Co-managing General Partner, Mayfield Fund
Kar met Dalal when he was the CEO of Claris, an Apple company,
in 1987. He was trying to persuade Dalal to start a software
development centre for Apple in India.
Invested in Indya.com
Navin Chaddha, Chairman &
Chaddha is an old Microsoft hand.
Kar is believed to have met him through mutual contacts.
Invested in the Microland Group
Ram Shriram, Managing Partner
& Chief, Sherpalo.
The former Amazon.com exec met Kar through mutual acquaintances
Invested in Indya.com
Parthasarathy, VP (Strategic Business Development), Microsoft
Kar got to know Parthasarathy when he was the CEO of Microsoft
Invested in Indya.com
Gupta, CEO, McKinsey & Company.
Kar reportedly got to know him through his auditors, PWC
Invested in Indya.com
Murdoch, Chairman, Newscorp.
Initial contact was established through James Murdoch (Rupert's
Invested in Indya.com (and now owns it)
Kar himself is far from modest when it comes
to explaining how he has transformed his empire: ''I have always
been able to spot inflection points in technology. All the transformation
has been to address the changes and take advantage of them.''
Only, all that trend-spotting hasn't helped
Kar realise his articulated objective of a revenue of Rs 1,000 crore
for the Microland Group by 2000. In 1997, Microland was ranked among
the top 10 it companies in the country by Dataquest magazine. Its
revenues for the year? Rs 182 crore. Today, Microland and all its
divisions and subsidiaries are estimated to rake in revenues of
Rs 54 crore. The exact figures are not known as all companies are
Kar has a ready explanation for the fall: it
is all Goldman Sachs' fault. ''Goldman Sachs released a report on
October 14, 1999, projecting that the number of net users in the
country would reach 70 million by 2003. We initiated our plans on
pure-play dotcoms based on the assumption that the projections by
such a renowned firm would stand. We knew that the market was still
evolving, and we were jumping into unknown territory. But we felt
that if we succeeded, we would have the first-mover advantage.''
The between-the-lines suggestion in that: pioneers don't always
The Selling Game
One of Kar's start-ups, Planetasia (founded,
1997; See A Brief History Of The Microland Group) does affirm his
status as a pioneer. It was about the web, and it was early by Indian
standards. His other companies, sadly, can't rightfully claim to
be pioneers: itspace.com, a tech-community portal, was born in 1999,
well after Cyber India Online. And Kar's most ambitious venture
to date, Indya.com, saw light of day in April 2000-a time when there
were already several horizontal (read all-purpose) portals.
Today, itspace, in Kar's own words is ''at
a standstill'', and Indya.com has been acquired by Rupert Murdoch's
Star Group. Kar claims to have made big money on the deal. Much
of that must have come from Murdoch's original investment, through
News Corp, into Indya. Those were the glory days of the net and
the company paid $50 million for a 32.5 per cent stake in a dotcom
that was then valued at around $150 million.
Refuting Kar's claim that other investors in
the portal made money when Star acquired all of Indya, a dealmeister
who played a part in the transaction says, "When the parting
came, everybody shared the liabilities together and nobody made
Star's later move to acquire all of Indya.com
was widely seen as an expression of Murdoch's desire to make the
best of a bad deal and convert Indya.com into an online extension
of its larger television strategy. Explaining this strategy, Sunil
Rajshekar, head of Star's online foray says: ''Future media consumers
will want simplified access to information on our bouquet of channels.
Indya, we believe, will be the hub on which this strategy will revolve.''
Too Near For The Far-Sighted?
What's intriguing is that someone as trend-savvy
as Kar missed the biggest and most profitable one of them all: export-led
software services. ''This,'' says a former colleague of Kar, ''despite
the fact that he headed, way back in the 1980s, the software services
division of Indian Organic Chemicals in the US-what was to later
become Sonata ''.
The man himself admits he missed the bus. ''The
single biggest regret I have is that we did not get into software
services earlier.'' The defence: Microland had an opportunity to
do so in 1996, through Y2K projects, but chose to give it a miss.
But that doesn't explain why all Microland companies continued to
ignore the export market till 2000. Planetasia, for instance, was
content to build websites for Indian companies till 2000. Eventually,
competition, and a price-war in the domestic market forced the company
to look without.
degree from Visvesaraya Regional College of Engineering, Nagpur,
Maharashtra; MBA from Mumbai's S.P. Jain Institute of Management
Companies he's worked for: Wipro
Information Technology; Indian Organic Chemicals
Awards: Recipient of the
India Young Business Achiever Award in 1989; Nominated as
a 'Global Leader of Tomorrow' by the World Economic Forum
Wife, Kalpana (40), Masters from Oxford; joined
Tata Administrative Services; worked with Tata Unisys &
Titan Watches; currently Honourary Member, Bangalore Agenda
Daughter: Pranika (three-and-half-years
Interests: Reading, music,
photography, & golf
Trivia: Founded an informal
Bangalore-based CEO club, the Beer Drinkers Association of
Information Technology (BAIT) in 1993; named sexiest man in
Bangalore in a recent poll conducted by a city newspaper.
None of this would have mattered had Kar managed
to make a success of each of his seven start-ups over the past decade.
Kar himself refutes this: ''In hardware we were major players by
the mid-1990s, but it was a low margin business and we got out of
it. (In) other businesses, like web services, we initially focused
on the domestic market, which was small.''
When Microland, a hardware vendor focusing
on the networking area, started a products division named Microcell
in 1991, most industry analysts felt it was an opportunity for the
company to become a large hardware distributor-much like Redington
and Ingram Micro have. But Microcell died a quiet death, largely
from apathy, in 1993, and declining margins and the emergence of
large hardware distributors played a role in Microland's decision
to exit the hardware business in 1997. ''Hardware is a business
where margins are wafer thin,'' says Anand Sudarshan, co-CEO, Planetasia,
and a member of the core team that founded the group. ''We decided
to get off the business even though it meant a decline in the topline.''
Decline is an understatement. The group's revenues plummeted from
Rs 182 crore that year, to Rs 20 crore the next.
Planetasia, the core of Kar's shrunken empire,
hasn't done too well for itself either. It registered losses of
Rs 15.83 crore on a turnover of Rs 24.85 crore for the nine months
ending December 31, 2001. ''The losses are on account of our aggressive
write-off policy,'' explains Kar. ''We expect Planetasia to clock
revenues of $15 million (Rs 72 crore) next fiscal.''
If there's an enduring mystery surrounding
Kar, it has been his ability to attract marquee investors despite
venture after venture of his flopping.
Posit that it is the greater fool theory that
has worked to his advantage and Kar is indignant in his response:
''John Sculley, Vinod Khosla, and Sanjay Parthasarathy, have bought
into our story. None of them can be called gullible''. Says the
Panchatantra-quoting venture capitalist, ''Kar is a great ideas
man; he is terrible at execution, and his glib oratory is his best
It's hard not to be swayed by Kar; the man
could charm the proverbial deaf adder. Indeed, so entrenched is
the myth about Kar's trend-spotting abilities that even hard-nosed
investors like Ram Shriram, Sanjay Parthasarathy, and Yogen Dalal
didn't think twice about investing in his ventures (See Kar's Network).
Kar had met some of these individuals (such as legendary venture
capitalist Vinod Khosla) during his stint in the US for Indian Organic
Chemicals, and nurtured the relationships over the years. Others,
he'd met at networking jamborees such as the World Economic Forum's
annual summit; he was young, presentable, articulate, and successful,
a killing combination.
Says Dalal, "Pradeep Kar is a wonderful
entrepreneur". Parthasarathy's response is similar. "Pradeep
was the only reason (for my investment in Indya.com)''. Kar also
cites the fact that ICICI Ventures and JP Morgan, have invested
in almost all Microland initiatives as evidence enough of the salience
of his ventures. Both icici Ventures and JP Morgan refused to speak
The way investors feel about Kar may have something
to do with his ability to find an exit for them. In the Indya.com
deal, for instance, Star bought out all investors; Kar says everyone
made money, but flaunts his privately-held status when asked for
details. ''We have provided excellent returns to our investors,
especially in the initial years. All our investors, except Star,
have made money.''
When queried about returns, Parthasarathy says,
''I am not complaining'', and Ram Shriram (formerly of Netscape
and Amazon), takes refuge behind the abstruse, ''Selling out to
a larger player was the best outcome. In this market, return of
capital is a good goal in certain circumstances.''
For the record, Kar who reportedly owns more
than 50 per cent of the Microland group (he neither confirms nor
denies this) hasn't been able to take any of his companies public-a
desire he first articulated in 1995. Nor does he seem to possess
a personal fortune to show for over a decade of enterprise. A Bangalore-based
venture capitalist claims Kar made just about $1.5 million (Rs 7.2
crore) from the Indya deal-not big money by today's standards. And
the man himself pointedly refers to the fact that he still lives
in a rented house in Koramangala, a Bangalore neighbourhood popular
with techies. Today, he says, the group is in consolidation mode.
''We have sufficient funds to keep us going. But should an opportunity
arise, and should we need funds for it, we will tap our private
That opportunity could be just around the corner.
Kar says he has spotted something in the networking space that will
become hot in the next three years. ''Obviously,'' he grins, ''I
can't disclose this now''.