RSS FeedNasscom Asks Government To Launch A VC Fund To Promote Software Product Startups
Sat, 12/24/2005 - 05:24 — Sahad P VIndia's software business body, National Association of Software and Services Company (Nasscom), has asked the government to set up a venture capital fund to promote innovation in software product space.
"This kind of a fund would ensure a sort of back-up for those angel investors and allow them to take a greater risk while funding product start-ups," said Kiran Karnik, President, Nasscom.
The fund would act as a back-up for angel investors by minimising the risk and encourage seed or early stage funding in the country. "In order to avoid the misuse, the fund could be managed by a group of recognised professionals, who could be rated by agencies like Crisil among others," he said. (Via Sify)
I agree that software product space in India is out of fashion and it's difficult to get funding. However, I would suggest that it's better not to invlove the government in such matters. If the government gets involved, then you are inviting bureacracy to rule over the body. You cannot have a government venture without bureaucratic involvement. Would you prefer to go to an IAS officer for funding or to a real VC who bets on the actual business potential than looking at how influential you are?
In fact, what Nasscom can suggest to the government are:
*Float a venture fund with the donations from rich IT companies
*Nasscom will be the adminitrator for the fund which will appoint VCs
*Make the contributions from these IT companies tax free
The government should only facilitate than directly getting involved in launching a fund.
PVS,
Too much attention has been given to IT start ups and software companies. Businesses outside of software domain, but with an online model for transacting hold the key to INDIA all round success.
Sucess is bound to follow in some non IT ventures with an online model where there is:
1) Scalability
2) Faster, efficient, customer-delight service
3) The same similar offline business model sucks and customers are looking for an alternative mode of doing the transaction
Five businesses growing at a fast pace in India that come to my mind are:
1) ONLINE Trading
2) Online Recruitment Services
3) Online Ticketing Services
4) Online Realestate/Wine Websites
5) Expatriate/NRI Centric models
1) Online Trading Websites
================
U might have seen the frenzy created by indiabulls.com and their successful IPO and the spectacular results as people embraced online investing faster rather than theoffline broker relationship as it bypasses all the hassels
hdfcsec.com, icicidirect.com, paisabuilder.com (IDBI's new venture), kotakstreet.com,sharekhan.com (SSKI grp) are some of the equity trading portals doing good business as equities both - primary + secondary market, options, NEW IPOs, commodity trading etccan all be done direct from ur online account. So the loop among U, ur bank account, ur online broker is complete.
Here in US similar models like E*Trade, Ameritrade, Scottsdirect, TAIB have similar models
2) ONline Recruitment
=============
BOOM or BUST, there is always demand for recruitment/job websites and niche domains to co-exist. www.dice.com is a complete IT focused job portal in US which does not have a similar player in Indian space.
Naukri.com and monster.com were doing brisk business post 2001 when almost most of the sectors were in a slump following dot com bust and 9/ 11.
Leading Newspapers are slowly moving into this space, like the Times of India's timesjobs.com portal
3)Online ticketing Services
================
Just imagine the pain, time involved in buying a train ticket and movie tickets for a new movie. The thought lf kills the idea of planning such an event.
Now online ticketing portal by Indian railways is doing good business and quarterly sales are shooting up by more than 100%.
http://www.irctc.co.in/
Same is the case where Movies/multiplexes are moving towards online ticket services and some players are even delivering them personally thru couriers to the customers residence when they book their movie tickets online
PVR Cinemas -http://www.pvrcinemas.com/pvr/index.asp
4) Online Realestate/ Wine sites
====================
Our own Mahesh Murthy (Passionfund) funded an idea which was ahead of its time for the Indian markets in 2000.
WIne.com does lucrative online business in US and a country like India which has taboo attached to drinking is changing fast with the Genx taking over.
Wine companies are seeing their reveneus climb northwards as evident by the results, expansion plans of Chamagne Indage, Grover Wineyards, Sular vineyards, but a good Inda centric brewery site with buy/sell/faqs/online social networking for drinkers is missing. Mahesh funded Tulleeho is trying to fill this gap.
http://www.tulleeho.com/tulleeho.htm
Realestate has been liberalized and the industry is expected to be $100 bilion by 2010. The offline market is fraught with brokers, dalals, with dubious track records, unclear titles, no transparency in the entire process and real estate is branded as not a liqufiable asset like cash or shares as the entire transcation to buy or sell would take months.
If this entire process is made easy and transparent, then people would flok to online space.
US has some good models like zipRealty Inc., which is using the Internet in a futuristic way to buy and sell homes, cutting costs in the process >> http://www.ziprealty.com
India has woken up to this potential and we see a new wave of portals from
the early movers like
http://indiaproperties.com/
http://www.99acres.com/ ( NAUKRI.com's realty venture)
http://www.indiaproperty.com/ (SIFY's new Realty venture)
5) Expatriate/NRI Centric models
===================
Hassle free Remittance services for NRIs like WesternUnion, Times of Money (http://timesofmoney.com/homepage.jsp) hold potential keeping the umbilical cord active for expatriate remittances to anywhere, anytime, anyamount (as long as it is less than $2k) in India witin 24 hours
Sulekha.com >> which provides many services for Indians who entered US for the first time or for job/accomodation searches for NRIs in US
Ur MAN in INDIA (http://www.yourmaninindia.com/ ) >>> TTK group's portal which provides various services for NRIs outside INDIA, who want small things still done in India but can't ask their parents to take care of these activities as the parents may not be aware, illeterate, old, disabled etc. provide good market