Helion Venture Partners, a $140-million multi-stage venture fund focused on Indian companies, has added a third company to its portfolio, investing an undisclosed sum in Gridstone Research, a provider of analysis and tools for investment managers....

Read the complete article at Red Herring.

Multi-stage India fund invests in Gridstone, founded by senior ex-Infosys executives.

By Kalpana Shah

Helion Venture Partners, a $140-million multi-stage venture fund focused on Indian companies, has added a third company to its portfolio, investing an undisclosed sum in Gridstone Research, a provider of analysis and tools for investment managers.

 Helion had invested $2.2 million in mobile payments firm JiGrahak in August of this year, and an unknown sum in MakeMyTrip.com earlier this month (see MakeMyTrip Makes $13 Million).

In March of this year, Gridstone had announced a first round from Charles River Ventures and Maverick Capital. Helion was part of this round but could not announce its participation because of some regulatory issues, according to Ashish Gupta, Helion’s managing director–investment advisor.

Gridstone has its headquarters in Freemont, California, but its development center is located in Mumbai, India.

Gridstone is concentrating on a particular niche in the financial research area. Investment managers and people researching companies often rely on Yahoo Finance or India Infoline for top-line information about the company’s business. Reuters and Bloomberg bring the breaking financial news.

There’s a mine of information in webcasts, conferences, press releases, blogs. Very little of this is taken into account.’ -Basab Pradhan, Gridstone Research.
Investment banks such as Goldman Sachs, Lehman Brothers, and Morgan Stanley do research for their own clients. But Gridstone plans to occupy a space smack in between these categories by offering qualitative research on a subscription basis.

Gridstone intends to use all this publicly available information, add more from tons of other unstructured information, and put together a package that includes insights and analysis not found elsewhere, said CEO Basab Pradhan.

“Gridstone Research is one of the most promising companies to emerge in the ‘productized offshore services’ space,” said Mr. Gupta.

Expanding from U.S. Companies

Gridstone’s database will initially consist of listed United States companies with over $2 billion in market cap and be offered on a subscription basis to customers. A flat fee of $10,000 per head will be charged per year.

The company has hired 110 researchers in Mumbai and is also outsourcing work to Pune-based Persistent Systems. The service will be available by subscription in January 2007, starting with tech sector companies.

The software to access the data has been built for Gridstone’s specific purpose. “All users get access to all the information that we have collected through our own methodology,” said Mr. Pradhan.

Needless to say, company updates will be a continuous feature. While subscribers can access the information they need by visiting the web site, Gridstone will periodically send out opinions and notes that users can add to their own spreadsheets.

Once it has U.S. companies covered, Gridstone will cover Europe and sometime in 2008 go for Japan, which is of great interest to U.S. investors, noted Mr. Basab.

“Companies spend inordinate amounts of time gathering information about their competitors and tracking them,” said Gridstone CEO Basab Pradhan. “We can now supply that information dispassionately and in an easy-to-read format.”

Having last worked at Infosys as global head of sales, Mr. Pradhan knows that most internally generated research that comes in zip-compressed files is rarely opened.

Occasionally, Gridstone may undertake further analysis of an industry sector for a client or set of clients. Mr. Basab expects to raise another round of funds in mid-2007.