Karnataka govt moots new VC fund

After the success of the Karnataka IT Venture Capital Fund (Kitven Fund), a venture capital fund specific to the IT industries, the Karnataka government is soon going to propose another VC fund with a higher outlay.

This was informed by Karnataka chief minister H D Kumaraswamy at the inaugural function of the new STPI-Bangalore facility, Cyber Park and the Orchid Incubation Centre in the Electronic City in Bangalore.

"I am happy to announce that the KItven Fund which was launched with contributions from the KSSIDC, KSFC and SIDBI has been exhausted and we propose to set up another Venture Fund with a higher outlay which will be providing venture capital both for IT & BT industries," Kumaraswamy added.

He said that Bangalore had been a magnet for IT companies. "During 2005-06 over 200 companies, including four Fortune 500 companies, have chosen Bangalore to start their operations. Apart from this, about 200 companies have expanded their existing operations in Bangalore," he added.

The chief minister said that although the city's infrastructure had been stretched to its limits, the government was making all efforts to solve all problems relating to infrastructure expeditiously.

He said that while welcoming the reverse migration of intellect and capital taking place from western countries to Bangalore, the government was encouraging firms to look beyond Bangalore.

"While we continue to welcome such an influx, time has come to look beyond Bangalore. With this in mind, the government is encouraging destinations like Hubli, Dharwad, Mysore and Mangalore," the chief minister added.

Promising the necessary infrastructure for the development of IT sector in tier-II cities, Kumaraswamy said that while Mangalore already have a special economic zone (SEZ), the state government is considering similar SEZs in other tier-II cities.