Kitven to nurture BT & nano streams besides IT

Nurturing future global IT leaders is its tagline. True to this core investment philosphy, the Karnataka Information Technology Venture Fund (Kitven), and its principal promoters, have been silently boosting technology investments in the State.

In fact, each of the technology-driven enterprise that the fund has catered to their capital needs, have now successfully carved a special niche for themselves in their domain space of activities.

Thus, flush from the success of its first fund which saw 17 early stage companies reap the benefits and grow into category-defining technology companies, State-sponsored Kitven has floated a new fund –– Kitven Fund 2 — with higher corpus of Rs 26.25 crore and increased investment outlay.  Official sources, requesting anonymity, told Deccan Herald that the fund is subscribed by four institutions — Karnataka State Industrial Investment & Development Corporation (KSIIDC with Rs 6.26 crore), Karnataka State Financial Corporation (KSFC with Rs 7.50 crore), Small Industries Development Bank of India (Sidbi with Rs 7.50 crore) and Karnataka Biotechnology & Information Technology Services (K-Bits Rs 5 crore). The new fund will to be invested in IT, BT and new emerging Nano Technology space, besides other knowledge-based industries. 

Sources said that Rs 2.5 crore has already been invested in two-year-old technology company specialising in data security leak prevention software product.

The product, they pointed out, sits on personal computers monitoring critical data and protect them from being downloaded or written into thereby help in prevention of sensitive and intellectual property data theft. Further, three more companies operating in IT and BT space have approached Kitven.

New avenues
As a new avenue, Kitven Fund –– 2 is exploring select growth oriented buy-out situations with modest leverage and open to consortium investment alongwith other VCs if investee company’s fund requirement exceeds the fund’s limitations.

While preferred form of investment is equity, the fund, will also invest in capital instruments like preferential capital (convertible/redeemable), debentures or combination of any above instruments.

The first fund, launched in 1999, with Rs 15 crore corpus, went into early stage investment of of Rs 50 lakh to Rs 1.50 crore size. The fund was closed in 2006.

The companies that benefitted from the first fund were RelQ Software, recently acquired by EDS, Logix Microsystems, Cerebra Integrated Technologies Ltd, iLantus Technologies, Internet Component Management Group — ICMG, etc.