Azim Premji-led Wipro Ltd, India's third-largest software services provider, has agreed to acquire a minority equity stake in Drivestream Inc, a US-based management and IT consulting firm specialising in Oracle cloud services, for $5 million (Rs 31 crore), according to a statement.
The investment is routed through Wipro's $100-million corporate venture fund 'Wipro Ventures', which was launched in September last year to invest in startups in emerging technologies in India and the US.
Prior to formally launching Wipro Ventures, the cash rich IT firm had invested in another new generation tech firm New Jersey-based big data and analytics provider Opera Solutions.
As part of the latest deal with Drivestream, the two companies will work together to build an integrated 'cloud solutions' stack for customers, Wipro said.
"Wipro's investment in Drivestream will fuel our ongoing efforts for continued creativity in the cloud service space. This strategic partnership with Wipro positions us for significant scalability both in the US and around the globe," Gopal Krishna, president and chief executive officer of Drivestream said.
"This unique complement of strengths between the two companies will enable us to jointly deliver value to our customers and enhance our leadership in the Oracle cloud market space," Bhanumurthy B.M., chief executive, application services and strategic alliances, Wipro Ltd, said.
Founded in 2002, Drivestream is a cloud applications systems integrator based in Virginia, USA. It has a majority of its delivery team in Chennai, and counts Intel, Bank of America, BAE Systems and Thales Communications as customers.
Globally, several technology companies such as Intel, Qualcomm, Cisco and Dell have dedicated corporate venture funding arms. In India, Wipro's rival Infosys also has a similar initiative.
Early this year Infosys formed a new $250 million (Rs 1,554 crore) 'Innovate in India Fund', which is roughly half of its 'Innovation Fund' aimed at backing startups and new ideas. The new fund will be dedicated for investments in new Indian companies that will be inducted into the global ecosystem of strategic partners that the company is building.
It had also expanded the corpus of its global innovation fund to $500 million from the original $100 million to provide financing to startups and new ideas in the field of next generation technology.