Entrepreneur duo - C Venkat Subramanyam & M Vinod Kumar - smell success in setting up two i-banking firms
In the late 90's, when C Venkat Subramanyam and M Vinod Kumar, who had just started Mantra Consultants, a boutique investment bank, met an entrepreneur at Ambattur in Chennai to talk about a private equity deal, they were asked to leave the room. The business-man did not like the idea of diluting his stake and letting outsiders in. Worse, he was suspicious of their motives. Venkat and Vinod entered the field when state-owned banks were the main funding source for aspiring businessmen. There were less than half a dozen venture capital firms in India. Awareness of private equity and its benefits such as access to funds, networks and best practices was low - especially in south India. Yet, when they started Mantra in 1998, after three years of working in Mafatlal Finance, helping companies with initial public offers, ignorance was not the only obstacle they had to face. In investment banking, pedigree matters: Ivy League degree, Big Five consulting experience and even family connections.
Venkat and Vinod had none of these. The typical 'guys next door' went to AM Jain college in Chennai before getting professional qualifications (CS in the case of Venkat and CA in the case of Vinod). Interestingly, they became friends during their Sanskrit class, which probably explains the names of the companies they founded: Mantra and Veda. Venkat, who has given professional cricket commentary on Doordarshan and continues to use a lot of cricketing metaphors, says, "investment banking is not about numbers, it's about how you manage three Es - Ego, Emotions, and Expectations," Venkat says. "And, of course, you have to basically establish the trust," Vinod adds. So, three years and 20 deals later when they were wondering if it's not too risky to be doing deals only in the IT sector (what if the sector slows down), they entered into a discussion of alignment with Ernst & Young. Mantra was acquired by E&Y in 2001. Vinod and Venkat (and the rest of Mantra team) worked in E&Y for two years doing more deals. But soon, their innate entrepreneurial spirit moved them to start a new venture. After serving the agreed upon time in E&Y, and a cooling off period, they founded Veda Corporate Advisors in late 2003. It was starting again from scratch. After they staretd Veda, they got a boost by the trust four clients reposed on them - MaFoi Management Consultants, Data Patterns, NewGen Imaging Systems and Landmark. And all the four deals were successfully closed when Vedior, Sidbi Ventures, Carlyle Group and Trent, respectively, took stakes in these companies. Veda has done 22 deals so far aggregating to $228 million (this is against $47 million from 20 deals by Mantra). "Even a $1 million deal was big during Mantra days," Vinod said.
While Mantra's focus was on IT, Venkat and Vinod have done a wider range of deals (retail, auto components, textiles, electronics, IT among others) this time round. To increase management bandwidth, they brought in two industry veterans: Mr Srikanth Narasiman, to manage client delivery and to lead technology, IT and ITES sectors, and Mr Narayan Anand to head real estate, debt and infrastructure practices.