BANGALORE: The National Association of Software and Services Companies (Nasscom) is launching a new initiative that will channel money and mentoring to emerging technology ventures following criticism that it pays too little attention to young companies in the sector.
In the coming weeks, the industry lobby will take 15 select startups on a road show toSilicon Valley and handpick the first batch of technology product firms for its acceleration programme. Last weekend, in a first-of-its-kind initiative, the industry body organised an event where angel investors wrote out cheques for four product firms that made successful pitches.
This heightened activity comes barely a month after InfosysBSE 0.26 % founder NR Narayana Murthy made several recommendations to recast the information technology body founded in 1988.
"There are newer segments being created to tap the massive potential of Indian product companies," said Krishnakumar Natarajan, MD of IT services firm MindtreeBSE -1.78 %, who took over as Nasscom's chairman earlier this month.
The composition of the new 18-member executive council has come in for stringent criticism for not making place for even a single representative from technology product companies. Apart from Natarajan, the council includes Wipro's Rishad Premji, Microsoft's Bhaskar Pramanik and other executives from domestic and international software services companies.
"There has been a disconnect in the past which is why the Murthy Committee was set up. This is an opportunity for Nasscom to restructure itself," said Sharad Sharma, a former chairman of the Nasscom product forum who helped in setting up a think-tank for product firms, iSpirt, a move widely regarded as a response to Nasscom's continuing focus on the dominant software services sector.
Technology product firms, which earn about $2 billion ( 10,700 crore) of revenues, are still a small segment within India's $100-billion software industry. But they are regarded as drivers for long-term growth.
"India has three times the number of product start-ups that Israel has, but they (Israeli companies) have managed to create more value than our entire industry combined," said Sharma.
The Murthy-led committee has recommended that the industry body reorganise itself under specific verticals to address the needs of technology products firms, domestic market, internet and mobile companies.
"A number of the initiatives have been in the works for some time now, but have gained far more vigour and speed after the committee's recommendations," said Natarajan.
At Shark Tank, the funding event held last weekend, Google's Rajan Anandan wrote a cheque at the venue itself for 25 lakh for a 10% stake in Bangalore-based Lumos Design Technology which designs and develops solar apparel such as backpacks.
Other angels, including Ramesh Shah and Ravi Gururaj of Harvard Business School Alumni Angels India, and Pankaj Jain of 500 Startups, committed money to syndicated equity-linked deals and convertible debt transactions.