SAP, which launched a $35 million artificial intelligence fund SAP.iO in March 2107 recently made its first investment in India in Ratan Tata backed startup, according to sources. The German multinational software corporation has not released a statement regarding the deal as of yet.

The Indian based startup was founded in December 2016 by four IIT Kharagpur alumni. It managed to raise Rs. 3 crore from Haresh Chawla, partner at India Value Fund Advisors, and existing investor Ronnie Screwvala’s Unilazer Ventures. In May 2016, the startup had also supposedly raised an undisclosed amount from Ratan Tata, the then interim chairman of Tata Sons.

Deepak Krishnamurthy, the chief strategy officer of SAP said, “We want to strategically invest and incubate startups around SAP, which has one of world’s largest set of applications for the enterprise industry. The fund will make prudent strategic investments.” The company plans to seal five investments by May 2017 across markets in countries such as the US and Israel.

To enhance SAP’s engagement with startups, SAP.iO plans to invest $10,000 to $250,000 in different companies. The first investment of the fund was in Silicon Valley-based big data and analytics startup Paradata. SAP.iO plans to finish 10-15 such deals this year with a higher target of 20-25 deals next year.

The Indian market is lucrative for SAP because the corporation’s investment strategy is in line with startups doing well in the B2B software-s-a-service market. Commenting on this, Krishnamurthy said, “The Indian market is interesting because there are a lot of companies coming up in the B2B space which are focused on applications rather than infrastructure side compared to other countries like Israel which are more focused on building platforms. Most of the revenues for SAP come from the applications, so India is a natural fit for us.”

SaP.iO also plans to source its deals from SAP Startup Studio which was set up within SAP Labs India campus in Whitefield, Bengaluru in 2016. The 100 seat incubator was set up for early-stage startups in the domains of internet of things, big data, cloud, retail and healthcare.

In addition to the investment fund, SAP.iO runs a foundry program which helps early-stage startups that build software applications, including those that use frontier technologies such as machine learning and block chain. SAP.iO foundries are currently present only in San Francisco and Berlin.

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