The National Venture Fund for Software and IT Industry (NFSIT) was launched by the Hon'ble Prime Minister Shri Atal Behari Vajpayee on December 10, 1999 in the presence of Hon'ble Union Finance Minister Shri Yashwant Sinha, Hon'ble Union Minister of Parliamentary Affairs & Information Technology Shri Pramod Mahajan, Hon'ble Minister of State for Small Scale Industries & Agro and Rural Industries Smt. Vasundhara Raje Scindia, and senior officials from the Government, representatives of IT associations, IT units and venture capitalists. The Rs. 1000 million fund has been set up by SIDBI in association with the Ministry of Information Technology.
The main objective of the 10-year close ended fund is to meet the total fund requirements of software and IT companies, particularly small enterprises, to enable them to achieve rapid growth rates and maintain their competitive edge in domestic and international markets.
The fund will develop international networking and enable assisted units to attract co-investment from international venture capitalists in the subsequent rounds of financing. It may also consider funding innovative incubation projects and development of products in the IT sector.
NFSIT is looking for projects offering potential for attractive growth earnings. Its primary focus is unlisted small companies set up as private or public limited companies in the IT sector and related business like e-commerce, networking, multimedia, data communication and value-added communication services. The minimum investment would preferably be Rs. 5 million. The extent of investment will depend on the size, nature and stage of the projects, expected growth rate, etc. Assistance will be structured on a case to case basis and will include equity or equity-related instruments. NFSIT will also consider co-investing with other venture capital funds.
The key criteria for the project selection include a strong management team with a demonstrated track record, projects in emerging IT areas addressing global markets, long-term competitive advantage and potential for above-average profitability leading to attractive returns on investment.