Kitao: Teaming up

Mumbai, Aug. 28: Softbank Investment, the venture capital arm of Japan’s SBI Holdings Inc, has launched its first India-focused venture capital fund in partnership with SBI Capital Markets, the investment banking subsidiary of the State Bank of India (SBI).

The $100-million fund will target India’s growing knowledge and technology space. A typical investment will be in the range of $5 million to $10 million with a holding period of three to five years.

The knowledge sectors include business process outsourcing, knowledge process outsourcing, life sciences, online businesses and technology-enabled design and manufacturing. It will also look for opportunities in the emerging areas of nano technology and environmental technology.

Softbank manages 18 other venture funds across numerous sectors around the world, including a recent collaboration with Singapore’s Temasek Holdings for China.

“Our fund with SBI Caps is the first step in a well-planned strategy to partner with leading financial services companies and deliver creative financial products focused on India. We will soon announce other important long-term initiatives about our comprehensive India strategy,” said Yoshitaka Kitao, chief investment officer, Softbank.

Softbank has substantial investments in Asia, both in terms of size and number of funds. Apart from making investments and bringing them to market, the partners seek to provide a bridge between the two countries to facilitate knowledge transfer and establish new corporate relationships between India and Japan.

“This will help create and nurture the knowledge-based industries in India in terms of investment and knowhow. This effort also recognises the immense untapped potential for cooperation between the two countries,” said .P. Bhatt, chairman of SBI.

“This is our first venture capital fund and marks our foray into the private equity space,” said Renu Challu, president and chief operating officer, SBI Capital Markets.

According to researchers at Asian Venture Capital Journal, Asian private equity funds under management rose by almost a quarter in the first half of 2006 to $138.5 billion from a year earlier.