Erasmic to launch $50 mn second fund

Erasmic Venture Fund, a Bangalore-based seed stage venture capital fund, is planning to raise its second fund of close to $50 million.

Google was among the key investors in Erasmic's first fund of $10 million and is expected to follow suit this time around.

Prashanth Prakash, general partner, Erasmic Venture confirmed that they are raising their second fund but declined to specify the corpus, stating they are in the process of raising the fund and will not be able to discuss more details. Industry sources however state that the fund will be in the range of $50 million.

Prakash further said that the volatility in the global markets will not have an impact on their fund-raising plans.

"First time funds may have a problem in the present market conditions. Funds like us who have established a track record will be sailing through," he said.

In addition to this plan by Erasmic, venture capital funds like Helion and Sequoia have raised India-dedicated funds in the range of $150 million to $300 million.

In the recent past, the eco-system of early-stage venture capital is crystallising in India. The success of the Silicon Valley in the United States has been widely-acknowledged by the vibrant angel-funding firms which exists in this innovation capital.

For a fact, angels in the US invested $26 billion in start-ups alone during 2007 across 57,000 companies.

"It is time this scenario picked up steam in India. Networks like Indian Angel Network, The Indus Entrepreneurs, Mumbai Angels have been striving to give an impetus to the sector. If early-stage funds like Erasmic and SeedFund Ventures too get their act together, it will be a worthwhile step forward," an industry analyst noted.

Erasmic initially started out as a technology-focused fund but has since diversified into other spheres of economic activity investing in firms as diverse as a fast food chain to engineering services to mobile value-added services.

According to Prakash, they will have a portfolio of 15 companies from their first fund and this second fund should be in place by the end of the present year.