SIDBI & CIIE.CO Join Forces For INR 40 Cr Deeptech Accelerator Fund

Small Industries Development Bank of India (SIDBI) has announced the SIDBI Accelerator Fund in partnership with the Indian Institute of Management, Ahmedabad’s startup incubator, CIIE.CO, with an initial corpus of INR 40 Cr. The fund provide pre-seed funding to deeptech startups.

The corpus will be equally contributed by the two entities. SIDBI and CIIE.CO did not specify the number of startups they plan to invest in or the average ticket size of the investments to be made from the deeptech fund.

The partnership is a part of SIDBI’s programme, India of Tomorrow, under which it collaborates with different incubators in the country to enable seed funding to startups in exchange for equity and promote deeptech and science-led innovation.

Over the past twenty years, CIIE.CO has backed over 350 startups across sectors, with a broad focus on three thematic areas: deeptech, digitisation and climate tech.

The development bank currently holds a corpus of INR 10,000 Cr under its Fund of Funds for Startups (FFS) scheme launched in 2016, investing in Alternative Investment Funds (AIFs) which in turn invest in startups.

As on December 31, 2022, INR 7,980 Cr has been committed to 99 AIFs and INR 3,400 Cr has been disbursed to 72 AIFs, which have in turn made investments of INR 14,077 Cr in 791 startups, the Minister of State for Commerce and Industry, Som Parkash said in his reply to a parliament question in February.

Besides offering equity investment, SIDBI has also ventured into the venture debt space. In February this year, addressing the IVCA Conclave 2023, SIDBI’s chairman and MD Sivasubramanian Ramann said, “Along with equity investments, we are talking about the ability to provide debt,” adding that the development bank has made four debt investments in this segment so far.

Before 2014, India had less than 100 deeptech startups. Between 2014 and 2022, this number increased more than 4x to 400-plus startups. 

Last year, MoS Rajeev Chandrasekhar said that the Indian government also plans to launch a deeptech fund called Digital India Innovation Fund. He further said that the next decade is going to be techade for India. “There are tremendous opportunities for young Indians. You won’t get these kinds of opportunities, anywhere outside India,” he added. 

At the state level, last year the Maharashtra government announced plans to set up an INR 200 Cr women-focussed fund to back early-stage deeptech startups. Addressing the Mumbai India Unicorn Summit 2022, Manisha Verma, IAS, principal secretary of Maharashtra State Innovation Society said that the fund titled ‘Maharashtra Innovation and Technological Development Fund’ will primarily focus on women entrepreneurs leading deeptech and socially relevant startups.

Additionally, in March this year, venture capital firm pi Ventures raised INR 22 Cr from Colruyt Group India to back the early-stage deeptech startups across sectors such as blockchain, spacetech, biotech, among others. Other deeptech focussed funds include Bharat Innovation Fund, Speciale Invest, Exfinity Venture Partners, and YourNest Venture Capital.

Update: The headline of the story has been edited to replace IIM Ahmedabad with CIIE.CO.

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