As of September 24 this year, 88 alternative investment funds (AIFs) have received commitments totaling Rs7,385 crore from the Fund of Funds for Startups, which was established in 2016. According to the report, these AIFs have contributed Rs11,206 crore to 720 companies. It further said that a significant part of the domestic capital mobilization in the Indian startup ecosystem has been played by the Fund of Funds (FFS) effort.
For FFS, a corpus of Rs10,000 crore was announced. The corpus will be developed during the course of the 14th and 15th Finance Commission Cycles with financial support from the Department for Promotion of Industry and Internal Trade (DPIIT), a ministry agency (FY 2016-2020 and FY 2021-2025).
Under FFS, assistance is given to AIFs that are registered with SEBI and fund startups in turn. The statement read, “FFS has played a catalytic role in facilitating the raising of domestic capital, decreasing dependence on foreign money, and supporting indigenous and innovative venture capital funds. FFS has not only given finance for enterprises at the early stage, seed stage, and growth stage.
Over Rs48,000 crore is the estimated corpus of the FFS-backed AIFs. Successful companies receiving FFS funding are seeing valuation rises of more than 10 times, with some of them even becoming unicorns (valuation of over USD 1 billion). Several well-known firms have received funding from FFS, including Dunzo, CureFit, FreshToHome, Jumbotail, Unacademy, Uniphore, Vogo, Zostel, and Zetwerk “It said.
Leading startup investment companies funded by FFS include Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, Aavishkaar, JM Financial, and Fireside Ventures, among other notable AIFs. It also noted that the amount pledged under FFS has increased significantly over time, registering a CAGR of more than 21% since the scheme’s inception.
In addition, the Small Industries Development Bank of India (SIDBI), which is in charge of putting the program into action, recently undertook a number of adjustments to make it possible for AIFs receiving FFS assistance to take advantage of expedited drawdowns.
The number of drawdowns increased by 100% year over year in the first quarter of FY 2021—22 compared to the first quarter of FY 2022-23, according to the ministry. Out of the 88 AIFs sponsored by FFS, 67 have been assisted in becoming anchored, and 38 of these fund managers are new, which is consistent with FFS’s primary goal of supporting venture capital investments for Indian entrepreneurs, the organization claimed.
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