Betting on IP

IT will be a fund with a difference. Nasscom, India’s famous IT industry lobby, and ICICI Knowledge Park in Hyderabad are in the process of setting up what will arguably be the first-of-its-kind early stage fund in the country, meant for the IT and life sciences sectors but with a clear focus on IP development.

The money will help fuel products and technology development in IT and life sciences, and span areas like wireless technology and automotive infotronics in IT and drug discovery and medical devices in life sciences.

To begin with, the fund, which is to be launched by September this year, will have a corpus of Rs 48 crore that will eventually go up to Rs 100 crore. “The need for such a fund is very evident because currently there is not enough funding available for start-ups that want to work on product development, and there is a gap between the funding they get from family and friends and those from VCs,” says Deepanwita Chattopadhyay, Chief Executive Officer, ICICI Knowledge Park. Also, she says, in life sciences a lot of money is needed even to establish proof of concept. In a sense, she adds, such a fund could play a role in getting start-ups “VC-market ready”.

The fund is expected to have a 10-year life cycle and will initially invest in 12-15 companies, with investments ranging from Rs 1 crore to Rs 10 crore. Who are the investors in the fund? Tata Consultancy Services is pitching in with Rs 10 crore, the IKP Trust (the promoter of ICICI Knowledge Park or IKP) Rs 5 crore and Bharti Airtel another Rs 5 crore. Talks are also on with other investors; besides, the Department of Science and Technology is also likely to invest. A seed fund for IP-creating start-ups is a fine idea. Let’s hope it flies.

—E. Kumar Sharma