The Bihar Startup Scale-up Financing Fund, to be managed by SIDBI, will be in the form of a Fund of Funds
The fund will not invest directly into startups but contribute to the corpus of SEBI-registered Alternative Investment Funds, which in turn would invest in startups
Last year, the Odisha government also launched an INR 100 Cr Odisha Startup Growth Fund with SIDBI as the fund manager
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Bihar Startup Fund Trust and the Small Industries Development Bank of India (SIDBI) have inked a pact to administer the INR 50 Cr Bihar Startup Scale-up Financing Fund (BSSFF) with an aim to transform the state into a startup hub.
Pankaj Dixit, IAS, director industries at the Department of Industries in Bihar government and Arijit Dutt, general manager representing SIDBI, formally signed the agreement, SIDBI said in a statement on Friday (February 23).
Bihar Startup Fund Trust is a nodal agency constituted by the Bihar government’s Department of Industries for the implementation of the Bihar Startup Policy. The policy aims to foster entrepreneurship and promote innovation by creating an ecosystem conducive to the growth of startups in the state.
Under the state’s startup policy, the trust has been allocated an initial corpus of INR 500 Cr, in which BSSFF has been established with an initial corpus of INR 50 Cr for scale-up funding support for the startups.
“The Fund, to be managed by SIDBI, shall be in the form of a Fund of Funds. In this model, the fund shall not invest directly into startup companies, instead, it shall contribute to the corpus of SEBI-registered Alternative Investment Funds, which in turn shall invest in startups,” the official statement read.
It is pertinent to note that in 2022, Bihar’s industry ministry had launched the Bihar Startup Policy to encourage entrepreneurship in the state. Under the policy, the state government offered an interest-free seed fund of INR 10 Lakh to startups for a period of 10 years, along with a grant of INR 3 Lakh for product development and training if a startup participates in an accelerator program.
On the other hand, over the last three decades, SIDBI has played a major role in introducing several pioneering steps for supporting the Indian startup ecosystem and also in providing financial services to the MSME sector.
Last year, the Odisha government also launched an INR 100 Cr Odisha Startup Growth Fund to invest in startups, in partnership with the SIDBI, which would be the fund manager.
Recently, SIDBI also entered the venture debt space and partnered with a few funds for debt investments.
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