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Public sector Canara Bank is looking for a strategic partner for its venture capital business. The bank may sell a stake in its venture capital subsidiary, Canbank Venture Capital Fund, reports Business Standard. The fund, the first to be set up by a PSU bank in 1989, has a corpus of Rs 112 crore ($27 million). The Bangalore-headquartered bank also plans to float a Rs 250 crore ($61 million) fresh fund to invest in SMEs, according to BS.

It's a good move to seek a strategic partner since PSU banks have generally failed in scaling their venture capital business. Among the PSU spin-offs, the only venture capital fund that has succeeded in making a mark in the VC business is UTI Ventures, which manages assets worth $220 million. That's probably because UTI Ventures ran the business independently even though UTI AMC remains as the chief sponsor of the fund.

The other PSU venture funds are SIDBI Venture Capital, which manages two funds with a total corpus of $133 million, and SBI Venture, which announced a $100 million venture capital fund in partnership with SoftBank of Japan.