The Internet and Mobile Association of India (IAMAI) on June 21 announced the formation of a Venture Capital (VC) Committee with marquee venture funds like Sequoia India, SoftBank, and Multiples Alternate Asset Management, among others as members.
The new committee will work on public policy consultations, stakeholder engagement, ecosystem enhancement, and building a strong industry network for VC firms.
In a press release, the not-for-profit industry body also said the committee will help in highlighting sector-specific challenges faced by portfolio companies of the member VC firms.
Established in 2004, IAMAI is a not-for-profit industry body representing the digital services industry with over 400 Indian and multinational corporations as its members.
IAMAI, in the release, informed that Vikas Agnihotri, Operating Partner at SoftBank Investment Advisers will chair the VC Committee and Shweta Rajpal Kohli, Chief Public Policy Officer of Sequoia India and Southeast Asia, will be the co-chair.
“We will work with all the stakeholders in building a robust and transparent framework for investors who are betting on India’s accelerating digital GDP..backing the high-velocity companies in job creation and capex spending, revving up the overall market buoyancy,” said Agnihotri.
The committee plans to provide a platform for the VC community where it can highlight the collective issues faced by such firms like direct foreign listing of Indian startups, clarification on gift tax, taxation on ESOPs, and so on.
VC and private equity (PE) firms have had a huge role to play during the funding party of last year.
As per Indian Private Equity & Venture Capital Association, Ernst & Young, India Trend Book 2022, PE and VC funds invested $77.1 billion in Indian companies in 2021, a jump of 62 percent over the previous year.
Kohli added, "The formation of this committee is a crucial step towards furthering the government's vision of turning India into an attractive investment destination for VC and PE firms and building a world-class startup ecosystem.”
IAMAI also named other domestic and international venture funds like Indian Angel Network, 3one4 Capital, and Eximius, among others as committee members.
With a massive fund flow into the startup ecosystem over the last couple of years, India currently is home to 69,000 startups and has minted over 100 unicorns, according to the National Investment Promotion and Facilitation Agency (Invest India).
India also stands as the third-largest startup ecosystem in the world.
However, the formation of the committee comes on the back of tech investors including Japan's SoftBank Group and New York's Tiger Global significantly reducing their exposure to high-growth companies after the two VC firms reported record losses.
Earlier this year, Finance Minister Nirmala Sitharaman said in her Budget speech that the government will form an expert panel to encourage venture capital and private equity investments, following a record-breaking 2021 for PE/VC investments.
She also informed that the government through this panel will examine "appropriate measures" to scale up investments, indicating more policies that could help investors who are pouring foreign capital into Indian companies.