Google to buy 30 per cent in seed-stage fund

Global IT giant Google will be investing up to Rs 22.5 crore in Ventureast TeNet Fund-II, a seed-stage fund that will invest in technology companies trying to establish their foothold.

The fund is promoted by Tenet Group of Chennai IIT and Hyderabad-based Ventureast Fund Advisors.

"Google has invested Rs 15 crore in this fund so far and is expected to put in the remaining amount by March 2008, when the fund is scheduled to close," Sarath Naru, Ventureast's managing general partner, said.

Google's investment in the fund will be 30 per cent and the remaining will be held by other investors, including SIDBI and Technology Development Board. Ventureast TeNet

Fund has a total size of $18.75 million.

Seed-stage funds, as the name suggests, invest in early-stage companies, plying in technology-based sectors such as IT, renewable energy and bio-technology.

Google made its debut as an investor in venture capital funds in January this year, when it invested nearly $3.75 million in a domestic seed investment firm 'Seedfund', which has a total size of per cent13 million.

This was followed by an undisclosed investment in the Bangalore-based early stage venture fund "" Erasmic Venture Fund, which has a size of around $10 million.

Google's Head of Corporate Development (South Asia) Samir Sood was not available for comment.

Google's Indian fund investments are learnt to be the first venture fund investment of the US Internet search engine firm, which has clocked a $4.23-billion revenue in the quarter ended September 30.

Google, which has largely been seen interested in investing in high-end technology-related ventures, is likely to come up with more investments in

Indian venture funds in future, according to industry sources.

VentureEast TeNet II fund is focused on technologies and solutions to the SME sector and in bridging the digital divide in the Indian system, Naru said.

Google, as a part of its strategy to enhance its presence in the Indian sub-continent, had recently come up with 'Google SMS' for Indian mobile users "" a messaging service that enables the user to avail information without an Internet connection.

Google has also recently joined the Indian Angel Network, an organisation that supports enterpreneurship in the country.