The onslaught of “economical, rapidly deployable” private equity funding in India is growing and it looks like 2008 will see another year of such phenomenal growth. Today, the Economic Times (India) carried a Press Release of a recent formation of a Nasscom–ICICI Knowledge Park fund of Rs. 100 crore (roughly $25.45 million). The fund is aimed at providing seed capital to startups creating intellectual property.
The corpus fund will be operated independently and managed by a professional team. Tata Consultancy Services (TCS), ICICI Knowledge Park and Bharti Airtel are the anchor investors.
The fund is expected to be operational by April this year and will attract the first round of investment from another 8-10 institutional investors, outgoing Nasscom president Kiran Karnik said. The plans for follow-on rounds are to attract another Rs. 150 crore – Rs. 200 crore.
The Nasscom-ICICI Knowledge Park Innovation Fund (NIIF) will focus on wireless technologies, automotive infotronics, life sciences, energy conservation technologies and devices and medical devices. “A stage has come when companies have to think beyond their interest. Companies can grow only when India grows but this thinking hasn’t yet percolated to all companies,” said ICICI group chairman N Vaghul.
NIIF fund will invest from Rs. 1 crore – Rs. 10 crore in early stage companies. Some of the other funds targeted at the early and seed stage funding in India are the Seed Fund, Indian Angel Network and Erasmic Venture Fund. However, these are not targeted only at start ups focused on creating IP.