Moneycontrol
Apr 21, 2017 09:57 AM IST | Source: Moneycontrol.com

Govt's startup fund invested Rs 623.5 cr in 17 venture capital firms last year

Nearly 17 local venture capital (VC) funds were sanctioned Rs 623.50 crore in the year to March, from the government’s ambitious Fund-of-Funds, set up to fund VCs that could, in turn, invest in early stage companies or start-ups.

Govt's startup fund invested Rs 623.5 cr in 17 venture capital firms last year

Moneycontrol News

Nearly 17 local venture capital (VC) funds were sanctioned Rs 623.50 crore in the year to March, from the government’s ambitious Fund-of-Funds, set up to fund VCs that could, in turn, invest in early stage companies or start-ups.

According to a Mint article citing data released by the Small Industries Development Bank of India (Sidbi) and Department of Industrial Policy and Promotion (DIPP), the first full-year analysis of the fund-of-funds reveals that the VCs that managed to grab a share of the fund invested in nearly 62 start-ups during the year.

The fund-of-funds saw limited takers since its launch in January 2016, mostly due to the slow and fairly complicated procedure of raising and deploying funds by VCs.

With Sidbi acting as a limited partner to the VCs, these 62 start-ups managed to garner roughly raised Rs 186.84 crore in FY17. The funds that invested in these 62 start-ups included Kae Capital, Orios Venture Partners, Unicorn India Ventures, Ideaspring Capital, Pi Ventures and Stellaris Venture Partners, among others.

It must be noted that only up to 30 percent of a VC’s corpus can be raised from the fund-of-funds and can be drawn from the Sidbi only when an investment opportunity arises. So, until March end, the 17 VCs had drawn only Rs 33.63 crore of the Rs 623.50 crore committed.

Of the Rs 10,000 crore, the government has only released Rs 600 crore (Rs 500 crore in March 2016 and another Rs 100 crore in March this year) to Sidbi so far. The balance will be allocated in tranches till 2025.
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