Software Technology Parks of India to launch a VC fund to support start-ups

Software Technology Parks of India (STPI), an Autonomous Society set up by the Ministry of Electronics and InformationTechnology(MeitY), will float a venture capital fund to support startups & entrepreneurs from the tier II and III cities to launch new technology products.

This comes in the backdrop of technology products exports expected to increase 7-8 times in the next five years from $10 billion now as envisioned in National Policy on Software Products (NPSP).

Omkar Rai, Director General, SoftwareTechnology Parks of India (STPI) said that one of the prime focus of STPI is to disperse the industry to Tier-II and III cities and to develop & nurture the eco-system for supporting startups & MSMEs.

Meanwhile, despite the pandemic STPI has given approval for 84,360 certificates, whose export value is estimated to be around Rs 46,556 crore during the lockdown. It also took a series of initiatives to help IT/ITeS companies to navigate the current pandemic. In the last couple of months, especially during the pandemic STPI has taken various initiatives including launching of six centers of excellence (CoEs) in emerging technologies and 10-15 more CoEs are in pipeline.

These centers will focus on new age technologies including artificial intelligence, machine learning, data analytics, autonomous connected electric shared (ACES) mobility, block chain, VR/AR, fintech, medtech, agritech among others. Through these centers, STPI shall act as single-window facilitation centres to extend requisite lab support, funding and mentoring to startups.

Till now, 12 CoEs namely “FinBlue at Chennai, IoTOpen Lab at Bengaluru, Electropreneur Park, an ESDM CoE at Bhubaneswar, Neuron– “Start-up Punjab Hub @ STPI” (SPHS) at Mohali, Autonomous Connected Electric Shared (ACES) Mobility CoE called “Motion” at Pune, Image at Hyderabad, VR/ARcalled ‘VAR’ at Bhubaneswar, Blockchain at Gurugram, MediTech at Lucknow, IoTin Agriculture + Startup Innovation Zone (SIZ) along with E-commercefacilitation at Guwahati, Animation + SIZ along with E-commerce facilitation atShillong, AR/VR + SIZ along with E-commerce facilitation at Imphal” have been launched. STPI is also planning to rope in a financial institution/fund manager to create a venture fund of Rs 120 crore for investing and managing seed funds in startups under Next Generation Incubation Scheme(NGIS).

This scheme will support around 300 start-ups for the next three years by offering Rs 25 lakh risk capital and Rs 10,000 internship per startup. Around Rs 95 crore has been allocated for the same purpose. Rai is optimistic that despite all the challenges, IT/ITeS exports from India will grow, but simultaneously, the growth of software products based on emerging technologies will surge due to rapid adoption of digitisation. He expects it to reach around $70-80 billion from the current around $10 billion, in the next 4-5 years.

STPI has supported the various initiatives of the government, while ensuring that IT/ITES works are not affected and helped them navigate smoothly during this lockdown period. The "Work From Home" to the IT industry has served as a boon for business continuity during this lockdown.He expects, while this norm will continue and this would help companies to save money, which in turn will be reinvested on people, skilling and will be used to develop new age technologies.

Software exports grew from Rs 3,75,990 in 2018, Rs 4,21,103 crore in 2019 and to Rs 4,47,750 crore from STPI in 2020. The total IT headcount reported by the units from the STPI is about 1.96 million for 2019-20.

STPI has registered 83 new exporting companies during this lockdown period which in itself is a motivating factor asnew business is also being considered. The renewal of LOP was accorded to 172 STPI registered units. The IT / ITES companies have also been submitting the export declaration forms during the lockdown period and STPIs in India have certified export declarations forms which amount to a total software export (off-site) of Rs. 46,556 crore during this lockdown.