Sidbi to launch $50m VCF for Silicon Valley start-ups

BANGALORE: Small Industries Development Bank of India (Sidbi) has decided to launch a $ 50 million (about Rs.225 crore) international venture capital fund (VCF) for financing new entrepreneurs in the American Silicon Valley.

The corporation is doing the necessary spade work and obtaining clearances for launch of the fund in the next six months, Sidbi sources said, adding, the fund would focus on IT entrepreneurs. The scheme for financing overseas IT venture is close to Sidbi`s just-announced Rs 100 crore national VCF. The corporation has also just moulded 12 state specific venture funds to promote IT industries in the small-scale sector.

As part of its initiative to emerge as a major financier in the IT sector, Sidbi would also launch a fund for Delhi to develop it as a hub for IT industry. The bank is currently assessing the foreign exchange requirement, RBI permit and demand for finance from the dollar-denominated fund for overseas entrepreneurs for finalizing the proposed scheme. As part of the proposed scheme, Sidbi would also set up an international investment committee to evaluate proposals and is likely to bring in hotshots of IT industry who have the required expertise to evaluate financial feasibility of startups.

While bulk of the financing for the proposed fund would come from the corporation itself, Sidbi is also open to contributions from others and these details would be finalized soon, they said. The international fund would target software and services companies focusing on upcoming technologies. This would include companies with Internet and e-commerce portfolio.