Nasscom, ICICI Group launch fund

To address the void in the seed funding segment, Nasscom, the IT industry body, announced the Nasscom-ICICI Knowledge Park Innovation Fund (NIIF) in collaboration with ICICI Knowledge Park. The anchor investors in NIIF are Tata Consultancy Services (TCS), Bharti Airtel and ICICI Knowledge Park (IKP).

NIIF has been created with the intent of providing seed stage investments in order to promote Intellectual Property (IP) driven innovations in emerging technologies. This fund is targeted at early stage companies with a core focus on creating IP, and academicians, researchers and incubates looking to commercialise inventions.

TCS has committed to invest Rs 10 crore in the fund, whereas Bharti Airtel and IKP would be investing Rs 5 crore each. The target for the corpus fund is around Rs 100 crore, from a maximum of 8-10 institutional investors.

NIIF also plans for follow-on rounds to attract another Rs 150-200 crore. The group will also approach the government, especially the Ministry of Science and Technology, for investment.

Kiran Karnik, president, Nasscom said, "While the larger firms have the wherewithal to invest in innovation, start-ups and young firms in India (with innovative ideas) often fail to scale up due to the lack of timely availability of seed capital. This situation is further exacerbated in the context of firms who focus on IP creation in emerging technologies, which often are high-risk and have long gestation periods."

NIIF will look at investment in a range of Rs 1-10 crore in any start-up. The key objective being to stimulate technology innovation through seed capital funding for opportunities in emerging technologies including IT, automotive, life sciences, wireless and clean energy.

NIIF will operate as a separate commercial entity with the fund corpus being created through voluntary institutional contributions from firms representing the targeted investment areas of the fund.

NIIF will have a full-fledged independent team to run its management. The process will take 90 days and NIIF will be functional by April 2008.

As of now, the following sectors have been identified as the key focus areas for investment by the fund "� wireless technologies, automotive infotronics, Life Sciences, energy conservation technologies and devices, and medical devices.

S Ramadorai, MD & CEO, TCS said, "We believe this is an important national initiative required to spur IP creation in emerging technologies and build an eco-system for innovation across the country. Early seed funding is a missing link and needs to be nurtured."