SUMMARY
Under the Fund of Funds for Startups (FFS) scheme, 88 AIFs have invested INR 11,206 Cr in 720 startups and have a collective corpus of INR 48,000 Cr
Investment into eligible startups is approximately 3.7 times the FFS disbursement, as opposed to the mandatory 2x: Govt
Some FFS-backed investors are Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, JM Financial, Fireside Ventures and more
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The Fund of Funds for Startups (FFS) scheme was launched under the Startup India initiative in 2016 and has since committed INR 7,385 Cr to 88 alternative investment funds (AIFs), a government statement stated.
According to a PIB release, these AIFs, in turn, have invested INR 11,206 Cr in 720 startups, having a collective corpus of INR 48,000 Cr.
Some investment firms supported under the FFS Scheme include Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, Aavishkaar, JM Financial, Fireside Ventures and more.
Notable startups funded by these FFS-supported AIFs include hyperlocal delivery platform Dunzo, fitness startup CureFit, D2C meat and seafood startup FreshToHome, B2B marketplace Jumbotail, edtech Unacademy, and more.
In 2016, the Indian government established a $1.5 Bn (INR 10,000 Cr) Fund of Funds for Startups (FFS) that would back early to growth stage innovative startups in the country.
It would support investment firms that had a tenure of up to 12 years with an individual corpus of less than INR 1,000 Cr. The FFS would thus help reduce the Indian startups’ dependency on foreign investors when raising funds.
The government in a statement said that the Fund of Funds has helped anchor 67 AIFs while 38 of the AIFs are first-time fund managers. FFS is managed by the Small Industries Development Bank of India (SIBDI), to back Category 1 and 2 AIFs.
The standard practice dictated that the AIFs personally contribute at least twice the contribution from FFS. “Investments into eligible startups is approximately 3.7 times of FFS disbursements,” the statement added.
In FY22, India’s Department for Promotion of Industry and Internal Trade announced that there were over 73K recognised Indian startups, providing jobs to nearly 7.7 Lakh Indians.
The minister of state for science and tech further stated that nearly 10.6K startups were funded by the government under the FFS and the Startup India Seed Fund (SISF) scheme.
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