Listening to Srini Rajam feels like being back in school. The CEO of Bangalore’s Ittiam Systems has a professorial air: his demeanor is calm and scholarly, his speech deliberate. He pauses at times to clarify jargon, jotting illustrations on a white board.
It could be a carryover from his side job, teaching “Entrepreneurship and National Pride” at the Indian Institute of Information Technology in Bangalore. “India as a country is now a major player in all aspects of the IT business, but it’s time we developed our own intellectual capital,” says Mr. Rajam. “Entrepreneurs should want to create brand-new products out of pride for their country, because that is what we need right now.”
National pride is behind Ittiam, a global company in the digital signal processing (DSP) market, which creates intellectual property for a number of different media and communications convergence applications. Ittiam’s technology is used to create products in digital media (for example, portable media players), wireless local area networks (WLAN), and IP telephony.
Last November the company was named the world’s most preferred supplier of DSP-based intellectual property, in both the software and hardware categories, in the DSP Professionals Survey 2004 by Forward Concepts, a market research firm located in Tempe, Arizona.
Ittiam was founded by six Texas Instruments alumni—four from the U.S., one from Europe, and Mr. Rajam, who was the managing director of TI in India. All are driven to give back to India what they have received from it, in education and other opportunities. “The aim was to build a world-class company from India,” says Mr. Rajam.
“For too long we have provided the services,” he says. “We decided we wanted to develop some intellectual property of our own.” The company, which was started in 2001 and named after an abbreviation of French mathematician Rene Descartes’ famous saying, “I think, therefore I am,” turned profitable last year, with $4.8 million in revenue. Ittiam sees itself growing into a $100-million enterprise over the next few years.
For Mr. Rajam and his colleagues, who all have significant DSP experience, getting started was not the issue; staying committed was. The first round of financing, $5 million from Global Technology Ventures in Bangalore, pushed Ittiam forward. Then came the tech bust and 9/11, which left Ittiam’s founders facing an uncertain future.
“I think one of the reasons we got into this was the challenge of starting a company and taking it to the top,” says Mr. Rajam. “Sticking around at a large company like Texas Instruments would have been easy. We were actually wishing for a more difficult challenge.” Since it was a company creating intellectual property, as opposed to company services, Ittiam had the luxury of breathing room. It was not expected to show results immediately. In the aftermath of the stock market crash, the company also was able to attract some top talent from the U.S. and abroad.
In December, Ittiam collected $6.5 million in its second round of financing, this time from Banc of America Equity Partners. That total took it to $11.5 million in a space where companies generally grow to between $50 million and $100 million. But dominating the DSP intellectual property market is not the ultimate goal for Mr. Rajam and Ittiam; the plan is to move into the DSP end-user space by manufacturing its own products like media players and mobile phones. Video also excites Mr. Rajam. “Voice and data are things of the past,” he says. “The so-called ‘killer app’ is video, because that is what the consumer wants. And we want to be prepared for that.” Ittiam is planning an IPO for 2008.
Mr. Rajam is, however, extremely satisfied that his company is accomplishing all of this from India, and he wants other entrepreneurs to follow Ittiam’s lead. “Things are much different now than they were 10 years ago,” he says. “Entrepreneurs today have lots of experience, a decent amount of savings, and a great deal of talent at their disposal. Even the international VCs are showing interest.” If Mr. Rajam is successful as a recruiter, he could help India fulfill its massive intellectual potential.