GVFL set to launch two new funds

Venture capital firm GVFL Ltd, which was set up with a World Bank initiative, on Tuesday announced that it will launch two new venture capital funds on the completion of its seventeenth year of operations.

The first VC fund will be a SME technology fund with a corpus of Rs 250 crore and the second tourism fund is likely to have a corpus of Rs 50 crore. The first closure of the SME technology fund will be in January 2008.

Talking to media, Vishnu Varshney, managing director, GVFL Ltd, said, "We will launch two new venture capital funds in the near future. One will be targeted at the small and medium size enterprises and the other will be for tourism. For the SME technology VC fund we have already got approval from Sebi and we have started fund raising exercise in the domestic market also. While for the tourism VC fund we have sent a proposal to the government for a Rs 50 crore investment fund. We have already started the various procedures for this fund also."

Varsheny added that for the SME fund GVFL will go for the biggest ever overseas fund in its 17 years of existence.

"We are planning to raise Rs 50 crore of Rs 250 crore from the domestic market and we have already received in principal approvals from many institutions. The balance will be raised from overseas institutions. The first closure of the fund will be at Rs 50 crore and we will start investing in companies from the first closure. We are sure that our first closure will come by January 2008. Thereafter we will go for the overseas fundraising exercise."

However, he did not reveal any domestic or overseas investors' names saying that it will be too premature to do so.

"For the tourism fund we have initiated various procedures and we have already submitted our proposal to the government. This will be a joined VC fund by private companies and the government. We came up with this concept because we foresee a bright future for the tourism sector in the state as well as the country."

"GVFL also plans to increase the corpus of its Gujarat IT fund from the existing Rs 29 crore to Rs 50 crore and plans to invest in two more companies through this fund by the end of this year. GVFL has already invested in two companies from this VC fund in the last six months. These companies include Rapid Radio and CEON Solutions," Varshney said.

"Under our existing Gujarat Biotechnology Venture Fund(GBVF) we are planning to invest in two more firms by the end of this year."

"VCs have pumped $ 508 million into Indian start-ups during 2006. This figure is projected to rise to $1 billion in 2007. We feel that the booming market is the correct time not just increase the funds but also to take up innovative investment opportunities."

GVFL has divested from 52 companies out of 60 till now and out of that 7 divestments have taken place in the past year. These exits were made through strategic buyouts by the promoters or other investors.