"Not too many people know that we are in the venture capital business," she responds. "That is a completely separate line of business for Citibank. It is a pure equity investing business. Yes, if we can leverage the bank's services through these sites, become a payment gateway, that's fine."

Products, services and technologies are all things, Citibank is looking at seriously in its venture capital activities. The bank has been in the venture capital business since end-1995. "We have been there for fairly long, and we've been through a huge learning process," says Ms. Ahuja.

Citibank has invested in about 30 technology companies in India already, including Polaris, DCM-ASIC and Silicon Automation, all chip design companies, and Kshema Technologies. "The bulk of our investments are in information technology, not dot coms. We have a couple of investments with infrastructure providers." In the last segment, Citibank invested in Dishnet DSL, the only DSL Internet service provider in India. Its investment of $ 5 million, in February 2000, translates to a 1.4 per cent stake in the company.

And the philosophy for Citibank's dot com investments: "Invest in sites that have the potential to become global or world class. Or, look at stuff where you actually use the power of the Internet. We look for sites that change the way you deliver business," says Ms. Ahuja.

Citibank's dotcom investments

Ms. Ahuja rationalises Citibank's investments in dot coms based on this line of thinking. So for iCleo.com, a site for the "over-15 year-old woman", she says, "At the time we invested in this vertical portal for women, there was no other women's portal. It was the first women's portal to be launched." Citibank India invested $ 0.14 million for a 33 per cent stake in iCleo.com in December 1999.

Interestingly, since Citibank feels that iCleo is a much younger, hip, attitude site, it has also acquired another site (name not revealed by Ms. Ahuja at this point, nor Citibank's invested amount) that targets the more mature woman, a site that is more housewife-centric. "The two will remain separate portals; they don't have to replicate content, but we can drive traffic from one to the other," says Ms. Ahuja.

As for the travel portal, travelmartindia.com, in which Citibank invested $ 1 million for a 22 per cent stake in March 2000, Ms. Ahuja says, "We were very keen on a travel site, which is most amenable to the Internet -- access, discounts, reverse auctions, all impossible in a real-world situation. travelmartindia.com sells travel-related services on the Net. What the site offers is not content, like other travel sites that have come up offer, but just value-added travel services, including forex, discount travel services, air ticketing, hotel and cruise reservations and holiday packages, for both retail and corporate segments. Our core investment philosophy is revenue generation. Revenue models are what are going to sustain."

Citibank has also joined the Times Group in a 40:60 joint venture on indiatimes.com, to provide a one-stop shop for financial products and services to Indians living in India and abroad. The portal, according to Ms. Ahuja, provides information and online services in the business-to-business and business-to-consumer areas from many of India's financial institutions, without bias towards Citibank’s services. Citibank's investment for the 40 per cent stake has been $ 7 million.

Here, there seems to be a clear intent to offer the bank's financial services through the portal. Ahuja confirms as much when she says, "We want to occupy the financial services space. We want to be a neutral service provider. Nobody gives you the entire range of financial services and we want to come in there and occupy that space, piggybacking on indiatimes.com's viewership."

In addition, Citibank has invested $ 0.76 million for a 20 per cent stake in mindzones.com, an interactive games portal for the youth (12-22 age group). "This portal offers services to school- and college-goers," says Ms. Ahuja. Among the site's attractions, she adds, are writing and poetry contests -- with scholarships offered by Citibank, among the prizes -- and a sports coaching section that is now under development. The company's investment in mindzones.com marks the first time it has invested in a dot com venture at the idea stage.

An investment in rediff.com, to the tune of $ 5 million for a 4.5 per cent stake, was a sensible move, Ms. Ahuja feels, since "the bank felt it was one of the few horizontal portals that had the potential to achieve large economies of scale."

The next steps for these ventures include, securing a second round of financing within the next six-to-nine months, and eventually obtaining a listing on one or more of the overseas exchanges, including Nasdaq.

Selection criteria

However, Ms. Ahuja is quick to clarify, "We do not select projects for investments from the point of view of capital market arbitrage. If these do arrive, that's a bonus. The whole venture capital business is about building value, building perspective. We look at whether the proposition is sound or unique. We ask ourselves, 'Ten years later, will this survive?' We see companies in every industry and the same parameter for evaluation holds true in every case -- has this venture got a good understanding of the space it operates or wants to operate in?"

Interestingly, while Citibank is open to putting venture capital into more dot com projects if they are worthwhile, it is unperturbed by the current fears in the market that B2C businesses don't seem to be working out, while B2Bs are. "Yes, there is a lot of money gone in and there are real causes for worry. But, even with a B2C, if we feel that by and large the ingredients are there -- understanding of the space, initiative, revenue generation potential and most important, quality of the management, how passionate, good, honest it is -- we could be interested in the proposition, whether B2C or B2B," concludes Ms. Ahuja.