'There is always risk associated with technology, entrepreneurs, and the market...'
                                        -Vishnu Varshney, president & CEO, GVFL

What is the focus of GVFL?
It is the oldest start-up venture fund in India. Started in July 1990, GVFL has launched five funds with a cumulative fund size of Rs 133 crore. In the initial years, the focus was on technology, consumer product, environment and IT. In 1997, the focus was more on ICT. And last two funds were sector-specific like biotech and SMB.

The company has an outstanding record. The focus is on start up and early stage venture funding. We are involved right from the concept stage where we make investments, do handholding, and nurture them. We do two more rounds of funding and then the companies move to private equity.  

What about ICT funds, and what is now on the offer?
In the third fund, E Info Chips was an outstanding success. This was Gujarat-specific fund as the government was keen to promote IT. In this case, Rs 10 crore was contributed from SIDBI, Rs 17 crore from Government of Gujarat, total fund was around Rs 35 crore.

We have already invested in six companies and one we have divested. The companies VC funded are Icenet (IP), Net4nuts, EQ (mobile commerce), Anupam (software), and Converged Labs (network design and mobile commerce).

The business plan for sixth fund is ready and we are approaching several prospective investors. In SMEs, we are looking at start up and early stage seed funding and we plan to invest in the range of Rs 1-10 crore. The total fund size is around Rs 100 crore.     

How are you different from company-owned VC?
Company-owned VCs look for strategic tie-ups for technology or for making inroads into a new market. These companies look at technology synergy, and look at companies in a specific segment, whereas we are working on broader technologies. The traditional VC companies are interested in 5-6 companies of the same category and are more interested in strategic synergies and not in value addition.

Does India require more VC funding companies?
India is an innovation center whereas China is a factory. For India to be a knowledge base, one has to promote innovation through venture capital. 

How has been your experience with telecom companies?
Out of all the sectors, the telecom sector has fetched the maximum money for the company. We had invested in Deccanet Design as a seed investor and got good returns when Flextronics bought this company.      

Hot areas where GVFL plans to do funding?
The emerging areas are: dotcom and telecom (m-commerce, and network design). All these have strong potential in the country. On the m-commerce side, the focus is on doing something different from the traditional approach. In terms of investment, I am on a lookout for a good telemedicine company and a good BPO company. We are also on the lookout for a good products company, which is unique in its proposition.

What are the risks associated with VC funding?
VC funding is very demanding, and  there is always risk associated with technology, entrepreneurs, and the market right from the seed stage.  

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