Indian software sector's apex body National Association of Software and Services Companies (Nasscom) has announced the formation “Nasscom-ICICI Knowledge Park Innovation Fund” (NIIF) in association with ICICI Knowledge Park.

The fund will invest in sectors such as wireless technologies, automotive infotronics, life sciences, energy conservation and medical devices.

The key objective of NIIF is to stimulate technology innovation by providing seed capital funding for opportunities in emerging technologies including IT, automotive, life sciences, wireless, clean energy, etc. The fund is expected to be operational by April this year.

Fund’s investors include India’s largest software services company Tata Consultancy Services and leading private telecom operator Bharti Airtel. ICICI Knowledge Park will also be investing a good amount in the fund.

The fund would have an initial corpus of 1 billion rupees in the first round with investments from a maximum of 8-10 institutional investors. TCS has committed to invest Rs 10 crore in the fund, whereas Bharti Airtel and ICICI Knowledge Park would be investing Rs 5 crore each. However, the return on investment made by companies contributing to the corpus has not been decided.

NIIF will operate as a separate commercial entity with the fund corpus being created through voluntary institutional contributions from firms representing the targeted investment areas of the fund.

During launching ceremony, Kiran Karnik, president, Nasscom said, “The Indian IT-BPO industry has grown ten times over the last decade and is today an important driver of the India growth story. To continue this growth trajectory and attain newer heights, Indian firms, irrespective of size or nature of activity, will have to develop new competitive advantages and increasingly focus on value capture through relentless innovation. While the larger firms have the wherewithal to invest in innovation, start-ups and young firms in India (with innovative ideas) often fail to scale up due to the lack of timely availability of seed capital. This situation is further exacerbated in the context of firms who focus on IP creation in emerging technologies which often are high-risk and have long gestation periods.”

A separate board and a team of professionals will be appointed to manage the day-to-day affairs of the fund, said Nachiket Mor, President of ICICI Foundation.