The 17 VC Funds That SIDBI Is Investing $96.5 Mn In

The Union Cabinet, chaired by PM Narendra Modi, approved the establishment $1.4 Bn (INR 10, 000 Cr) corpus of ‘Fund of Funds for Startups (FFS) by the Small Industries Development Bank of India (SIDBI) in June 2016. This fund was sanctioned for contribution to various Alternative Investment Funds (AIF) registered with the Securities and Exchange Board of India (SEBI). These AIFs were to extend funding support to startups and the move was in line with the Start up India Action Plan unveiled by the Government in January 2016.

The process of creating a fund, attaining a close and finally investing in startups is a time-consuming process that requires careful review. A recent report released by DIPP and SIDBI states that the Government of India released the first tranche of about $77 Mn (INR 500 Cr) on March 30, 2016 and a second tranche of about $15.4 Mn (INR 100 Cr) on March 10, 2017.

Also, it specifies that under the FFS, as of March 31, 2017, SIDBI has committed about $96.5 Mn (INR 623.50 Cr) to 17 Alternative Investment Funds. The corpus of these 17 funds is about $1.18 Bn (INR 7,675 Cr) and, out of the committed amount, it has disbursed about $5.2 Mn (INR 33.63 Cr) till March 31, 2017

The AIFs that are funded under FFS include Kae Capital Fund II, Orios Venture Partners Fund II, Saha Fund Scheme I, Kitven Fund III, Unicorn India Ventures Fund I, Idea Spring Capital – Future Now, Pi Ventures Fund I, Ventureast Proactive Fund II, Omnivore Partners India Fund 2, Parampara Early Stage Opportunities Fund I, Ivycap Ventures Trust Fund II, IAN Fund I, Aavishkar Bharat Fund, Stakeboat Capital Fund I, Stellaris Venture Partners Fund I, Oorja Capital, and Chiratae Trust.

Out of these, the maximum commitment was given to Chiratae Trust – that has a corpus of about $92.8 Mn (INR 600 Cr). The AIF with the highest corpus is Aavishkar Bharat Fund with a total of about $309.5 Mn (INR 2,000 Cr). The SIDBI has committed $5.4 Mn (INR 35 Cr) to this AIF.

AIFs that have been disbursed money include-

1. Kae Capital Fund II Disbursed – about $1.32 Mn (INR 8.54 Cr)
2. Idea Spring Capital – Future Now – $299K (INR 1.93 Cr)
3. Pi Ventures Fund I – $487K (INR 3.15 Cr)
4. Chiratae Trust – $2 Mn (INR 12.98 Cr)
5. Parampara Early Stage Opportunities Fund I – $343.5K (INR 2.22 Cr)
6. Stellaris Venture Partners Fund I – $744K (INR 4.81 Cr)

As per the available list, these AIFs have invested in 57 startups, that have cumulatively raised about $28.9 Mn (INR 186.84) Cr till date. However, the numbers from a few AIFs are still awaited.

In March 2017, the Union Cabinet approved new proposals, with regard to the Fund of Funds of Startups.

• The AIFs supported by FFS shall invest at least twice the amount of contribution received from the FFS in startups qualifying as per the DIPP criteria.
• If the amount committed for a startup in whole has not been released before it ceases to fall under the definition of a startup as defined by DIPP, the balance funding can continue thereafter.

(The development was first reported by Mint)