The Small Industries Development Bank of India (SIDBI) has cleared sanction requests from nine funds aggregating to about $45 Mn (INR 300 Cr).
During FY ‘15 and FY ‘16, sanctions were given to 11 funds (INR 314 Cr) and 16 funds (INR 607 Cr) respectively. During the current FY, this number has already crossed $167 Mn (INR 1,112 Cr) to 30 funds.
In December 2015, the Union Cabinet cleared the Fund of Funds for Startups under the SIDBI for contribution to various VC funds registered with the Securities and Exchange Board of India, as part of the Startup India Action Plan. In February 2016, reports emerged that the SIDBI will be raising the proposed $1.4 Bn (INR 10,000 Cr) corpus for ‘Stand Up India Fund’ from RBI. In July 2016, it was announced that SIDBI will invest about $64 Mn (INR 428 Cr) in eight venture funds.
Till date, INR 500 Cr has been released to the SIDBI which is managing the programme.
As manager of these funds, it has formulated a Venture Capital Investment Committee (VCIC) which includes external experts like Mohandas Pai, Sanjeev Bikchandani, Saurabh Srivastava, H.K.Mittal, Prof. Vaidyanathan, Kiran Karnik, etc.
Apart from this, SIDBI is also operating various other fund of fund programmes investing in MSMEs and startups viz. India Aspiration Fund (IAF) in August 2015; ASPIRE Fund focussed on agri and rural enterprises launched in 2016; about $30 Mn (INR 200 Cr) on behalf of LIC.
Of the funds cleared earlier by the VCIC, the SIDBI has so far accorded formal sanction, for an aggregate contribution of about $242.7 Mn (INR 1619.25 Cr).
With the proposed modification, the coverage under Funds of Funds is expected to stand at around INR 600 Cr, with respect to 15 Alternate Investment Funds by March 31, 2016.
As per a statement issued by the SIDBI, the investment in startups by the funds supported under Funds of Funds is expected to cross INR 1,200 Cr over the next 12 months, as they raise the balance contribution from other investors and pick up the pace of investing.
In February 2017, the Department of Industrial Policy and Promotion (DIPP) also announced its plans to expand its $1.46 Bn (INR 10,000 Cr) startup funding scheme, to promote entrepreneurship.