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May 11, 1998



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CA is setting up a venture capital fund
to promote India's software industry.

The Indian subsidiary of Computer Associates International Inc plans to set up a new company in the country for promoting venture capital in the software industry with an upfront fund of $30 million.

The proposed upfront venture capital fund of $30 million by Computer Associates India Private Limited will be in addition to the $100 million
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investment, which CA has decided to make in India over the next five years.

However, sources in CA at the 'CA World 1998' international conference have been reported as saying that the proposed upfront venture capital fund of $30 million by CA is expected to go up 'significantly', once the ball is set rolling.

Ian Hugh, general manager, India and SAARC region, has said that the plan will be part of a CA's unique 'incubator' programme being worked out for the Indian information technology industry and will offer infrastructure and distribution services to promote their companies.

Besides promoting software industry venture capital funds, CA's 'incubator' programme will focus on two more areas: helping those software companies in realising their bright ideas for the global market and also giving them a hand at reaching the international market.

"We'll provide low-cost exporting facility and also assist them in marketing their products at the global level," Hugh said.

CA will mainly assist companies wanting to develop applications around CA's mainline platform 'Unicenter' and other products.

This is expected to promote its products in the international markets.

He disclosed that close to 40 companies in India have sent in their proposals to Computer Associates, seeking venture capital and other assistance.

"We've shortlised a few of them," he said, adding that an announcement would soon be made on this. While Computer Associates will offer funds and technical assistance to Indian software companies, CA's Indian partner, the Chatterjee Group, will use its expertise in fund management and venture capital business for the 'incubator' programme.

Both groups have reasoned that 'tapping of technical and human resources' in the country is their main motive behind choosing Calcutta as their software base in India.

"Indian software industry has to go for higher risk and high-reward ideas. There's a lot of talents here, but, lack of risk-taking and working capital are stopping the industry from leapfrogging," Hugh said. "This is where we want to step in," he added.

Ian Hugh will manage CA's Indian operations for marketing and sale and Venkat Subbarao, who joined as the chief executive officer of its joint venture in India, will manage the 'incubator' programme.

The company had announced its joint venture with TCG Software in December. Soon after, CA had initiated steps to set up a mission-critical business software development centre in Calcutta.

According to Venkat Subbarao here, CATS in Calcutta will have 250 software programmers by end 1998.

- Compiled from the Indian media

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