Nasscom, the trade body of the IT software and services industry, has mooted an India Innovation Fund to provide angel stage funding to start-ups to drive innovation in emerging technologies. The fund will have a corpus of Rs 100 crore (Rs 1 billion), which could be increased to Rs 150-200 crore (Rs 1.5 to Rs 2 billion) in the next two years.
The fund will be set up through a public-private partnership, where the government role will be limited. The investment decisions will be taken up by professional fund managers. The fund will allow private investors to acquire stakes in the professionally-managed PPP fund, Nasscom said.
Kiran Karnik, president, Nasscom, said, "We want this fund to concentrate on start-up firms focusing on innovating technologies. We are not looking at stage-B funding for somebody who is already established and looking at further growth."
He said many companies had shown interest. "Initially, we are looking at contributions from across the industry, financial institutions and companies. We are talking to many companies who have shown a great deal of interest and also some financial institutions, including ICICI," Karnik added.
Nasscom has projected an additional revenue potential of $51 billion by 2012 for Indian IT/ITeS firms by driving innovation.
In a study 'Indian Innovation Report 2007', conducted in partnership with Boston Consulting Group, Nasscom said by focusing on innovations, Indian IT/ITeS firms could target a potential revenue of $175 billion by 2012 against the projected revenue of $124 billion. The industry clocked $39.6 billion last year.
The report has recommended the creation of an ecosystem in partnership with industry, academia and the government.
"Innovation does not thrive in silos. Support from the ecosystem is important in making innovation at firms and at the country level successful, " said James Abraham, director, BCG.
