Qualcomm Ventures Uses QPrize to Fill VC Void, Seed Wireless Startups Around the World

8/14/09Follow @bvbigelow

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an application services company that is targeting mobile devices, for example—particularly for entrepreneurs in China and India.

Over the past year, Kashyap says, “The venture capital industry got really bad. What we saw was a dramatic decline in VC investments… What we didn’t want to see was a lack of investments in the wireless sector.”

The idea of creating a substantial prize for an international business plan was a natural extension of Qualcomm Ventures’ expansion into overseas markets. The wireless technology and chipmaker launched its corporate venture arm in 2000, as Kashyap puts it, “to invest in companies that are strategic to Qualcomm’s interests.”

While Qualcomm Ventures operates what Kashyap calls “a balance sheet fund” that draws investment capital as needed, it established a $100 million regional fund in China five or six years ago and a comparable European fund about three years ago. Qualcomm Ventures set up a $60 million fund in South Korea, and recently started investing in India and Israel.

As we reported in May, Qualcomm Ventures plans to select a semi-finalist from China, India, Europe, and North America. The four semi-finalists will each receive  $100,000 that’s in the form of a convertible note (meaning the note gets converted to preferred shares of the start-up company at their next round of equity financing). Each semi-finalist also gets an invitation to compete for a $150,000 grand prize in November at Qualcomm Ventures annual CEO Summit.  Qualcomm Ventures has plans to invite VCs, independent investors, and the CEOs of all of its portfolio companies to the San Diego event.

“So you get the cash and a jump start,” Kashyap says. “This event is pretty high-profile.”

As an added incentive, QualcommVentures decided last month to extend the deadline for QPrize submissions until Aug. 21 so the grand winner also can compete as a finalist in the GSMA’s Mobile Innovation Grand Prix. The contest is part of the wireless industry association’s “Globile Mobile Awards” announced each year at the GSMA Mobile World Congress in Barcelona, Spain. Qualcomm Ventures also agreed to provide its grand prize winner a free trip to Barcelona for the event.

“They want to promote the mobile ecosystem as well,” Kashyap says. “The QPrize isn’t going to solve everything,” he adds, “but it is going to be more of a factor in helping seed the industry.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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