Bangalore : Well-known venture funding arm of the IL&FS group-IVC (IL&FS Venture Corporation Ltd) is likely to invest a total of $7 million in three IT companies as part of its focus on funding businesses in the technology sector. Of the three companies, two are based in Chennai and IVC will invest $1.5 million in each, while the third start-up based in Bangalore will attract an investment of $4 million. All have been promoted by entrepreneurs hailing from large well known market players.Speaking to The Financial Express, IVC managing director Hetal Gandhi said the investments being considered would be made out of the remaining $16-$18 million from IVC's original fund of $65 million. Incidentally, IVC is in the process of jointly raising a proposed fund of $100 million with US-based Invesco. ``IVC's key focus has been on investments in the IT and bio-tech segments. In the IT sector we are looking at the telecom, niche applications (like directory-enabled services/enterprise integration) and software services areas. In bio-tech we are looking at investing only in contract research and life sciences companies,'' Mr Gandhi said.
With the onging US downturn, according to Mr Gandhi the investor community was, in general, tightening up on investments, but adequate capital was still available for India-especially since most players have set aside funds for India. ``One general fact is that valuations have rationalised so this is an interesting time to be a VC.
The telecom sector is also a fairly good area to invest in, especially since world over all the large players have committed huge investments towards setting up 3G networks. So building applications and services around this is bound to be a key area of activity,'' he said. While initially IVC was considering setting up an incubation initiative for its investee start-up companies, the venture fund has decided to go slow on that front since setting up management teams and infrastructure to manage the initiative were turning out to be fairly complicated processes.``However, we will continue to work very closely with our investee companies and provide them all the support that they need to fine tune their business,'' Mr Gandhi said.
Better late than never for $ 75m fund
The joint $100 million fund being raised by IVC and Invesco has received commitments worth $33 million from investors, according to IVC managing director Hetal Gandhi. While plans have been slightly delayed owing to market conditions, the company is expecting to close the fund at probably around $75 million by June this year following which investment activities out of the new fund will commence.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
