Sep 04, 2013
Dallas’s Naya Ventures Targets Investments in Telecom Startups
Dayakar Puskoor wants you to know that North Texas’s telecom scene is not dead yet.
More than a decade after the region’s telecommunications industry busted, leading to company closures and layoffs numbering around 100,000, Puskoor hopes to be part of its resurrection. The software engineer turned entrepreneur and investor believes so much in the region’s strength that he founded Naya Ventures, a Dallas-based fund with a mission to help boost telecom startups both locally and nationwide.
“We are a portfolio operator VC,” he says. “We don’t only invest cash.”
Puskoor, Naya’s managing director, founded the $50-million fund in 2011, and has closed on $10 million of that. Most of the investors are high-net-worth individuals, and Puskoor says he is approaching institutional capital and family offices to raise the remainder.
In the last two years, Naya—which means “new” in Hindi—has invested $3.3 million in a dozen startups, three of which are based in North Texas.
Puskoor has a particular affinity for mobile startups in Dallas. He founded JPMobile in the city in 1996 and sold it for $500 million in 2005 to Good Technology, which was later bought by Motorola. He also served as a senior director at Microsoft, incubating cloud infrastructure projects.
Naya has an office in Seattle, which is headed by co-founder Prabhakar Reddy and includes Gowri Shankar, the former CEO of SinglePoint Technologies. There is also an office in India, playing on the men’s relationships there.
“We have been able to attract pretty good talent,” Puskoor says. “People who are coming as advisors to us. They are able to evaluate what type of companies we are looking at.”
Naya’s portfolio companies include Dallas-based OyoKey, which has cloud-based addressing and recognition technology; Glympse, a Seattle location-sharing mobile service; and Altia Systems, a video and Web collaboration software provider based in Cupertino, CA.
Still, it’s nurturing the telecom ecosystem in Dallas that is closest to Puskoor’s heart.
“I had so many people, when I was raising capital at JP Mobile, big VCs who wanted me to move to the Bay Area,” he says. “But Dallas grows on you and it’s a good place to live. I wanted to raise my two boys here. It’s a great place with engineering talent.”
Here are some more highlights from our conversation:
Xconomy: What is your goal with Naya? Why specialize in mobile?
Dayakar Puskoor: When I was starting to invest my own money, and friends and family money, I was not able to scale. But we have good connections within these companies in the telecom ecosystem. We can help portfolio companies in strategy and business development. If a company comes to us only for the cash, we don’t invest. We do a lot of legwork and evaluate companies. We were able to get bigger VCs to invest with us. With Boxfish, we put in half a million and then T-Venture came in with $3 million.
There is a lack of funds in mobile cloud and big data emerging tech, and very few people have expertise in these areas. We can help these companies with what to do, what not to do, and connect them with the right partners. A startup needs more than cash; it needs help to grow the company. We are able to help the company find the right people, make sure the strategy and messages are right. We helped Glympse with Samsung [for example]. The Glympse app is going to go on every Samsung wearable device. We are getting these first and second partnerships and getting others VCs to co-invest with us.
X: How would you describe the Texas VC market right now?
DP: It’s totally dried out. We used to have a pretty good VC presence here: Hunt Ventures, Sevin Rosen, InterWest. After telecom died, these VCs didn’t raise next funds. Money dried up. Two years back, I felt that we needed to start the ecosystem again. I also got involved with local organizations like TiE [The Indus Entrepreneurs] to make sure to start nurturing telecom entrepreneurs. I am seeing lot more activity here in incubation and acceleration here with the [Dallas Entrepreneur Center]. We’re not Silicon Valley, but I’m encouraged that there is a lot of activity happening here now.
We were able to convince our investors that having a mix of California and Seattle helps nurture the Texas investment. I’m happy to say that some of our current investors, they increased their commitment. They see the progress we have made. It’s not that easy, to be honest with you, when we first started. But we believe there is a market.
X: What is going on in the North Texas telecom startup scene? What is the legacy from the days of the “Telecom Corridor?”
DP: In Dallas, we have a lot of big companies, a lot of people with experience. We just have to see how they can take a chance and start a company. Next year, we definitely want to see a lot more companies from Dallas in mobile, cloud, and big data. We are definitely seeing activity—people are willing to leave big companies like Pepsi, Sabre, Verizon. It’s been a big difference than from 2011 to 2013 when we could not find companies locally. That’s the reason why we invested in Bay Area [startups].
Now we have Dallas angel groups, and they will start investing in some of these companies. That will help us. And we are starting a network within TiE, called TiE Angels Dallas, and within that we are starting mentorships. I am co-chairing this. We will allocate some time for entrepreneurs to come on Saturdays or Sundays for free, for two or three hours, and ask any question. [The financing climate] is not where it should be, but we have excellent technical talent for a startup company.
X: What has been your best investment so far?
DP: They are all good investments! Four of them already are in their Series B round. Some of them are getting strategic calls from people who would like to see these companies as part of bigger companies. The Dallas companies are doing really well. Motivity Labs, has grown from 20 to 140 people and $5 million revenue.