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SAN FRANCISCO, Apr 17: Silicon Valley venture capitalist Norwest Venture Partners has raised a $650 million fund, its largest ever, and is turning its sights on expanding investments into India and China, a partner said on Sunday.

Norwest, also known as NVP, said the new fund, Norwest Venture Partner X LP, is targeting early stage technology investments, with a concentration on emerging growth markets, NVP general partner Promod Haque said in a phone interview.

The Palo Alto, California-based venture capital firm behind such successful former start-ups as PeopleSoft, Tivoli and RF Micro Devices, brings NVP's total capital raised to more than $2.5 billion to date. The largest previously was the $400 million NVP IX Fund, which closed in late 2001.

Norwest is expanding both in the United States and overseas as a result of closing the new fund, Haque said. While the bulk of the fund will be invested in the United States, up to a quarter will be in emerging markets such as India and China.

''It is difficult to start a company in India today that is building products for the global market there,'' Haque said of the selective approach to investing in emerging markets.

''If you look at where the early adopters of disruptive technologies are, they are still centered in the United States,'' he said, adding that the wireless market is the only exception to this general rule and is more advanced in Asia.

Many of the companies based in the United States will have development and other operations based overseas, which Haque described as the ''hybrid'' approach to company development that is common to many companies that have roots Israel and India.

In Israel, NVP targets security and communications firms.

These include Veraz Networks (http://www.veraznetworks.com/), a supplier of voice over Internet gear for telecommunications carriers, which is reportedly readying for an initial public offering later this year.

''The company is at the stage where we can't talk about it,'' Haque said when asked about the timeframe for a possible IPO.

In India, NVP's most recent investment was Yatra Online, which together with Reliance Capital and other Indian partners is seeking to be an early entrant into India's online travel services market.

It expects to announce further deals in India shortly.

Haque sees opportunities serving the internal Indian market via consumer Internet services. The focus is on transactional e-commerce companies and advertising-supported start-ups.

Another area NVP will target is outsourced product development, he said.

The firm already invests in Pune, India-based Persistent Systems Pvt. Ltd. (http://www.persistentsys.com/), a 15-year-old company with 2,200 software developers.

In the last three years alone, the company's portfolio companies have generated $1.7 billion in value for the firm through acquisitions, initial public offerings or other exits, according to Norwest.

REUTERS

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