SIDBI Sanctions .₹ 1,000 cr to Support Early-stage Startups
Amount to be given to 30 venture funds from India Aspiration Fund
Mumbai: The Small Industries Development Bank of India (SIDBI) has sanctioned .₹ 1,000 crore to 30 venture funds through the government-financed India Aspiration Fund, which seeks to support startups in their early stages. The amount was sanctioned by the SIDBI executive committee from the .₹ 1,416 crore approved by its independent advisory venture capital investment committee, chairman Kshatrapati Shivaji said.
Earlier this month, SIDBI signed a memorandum of understanding with Life Insurance Corporation of In- KSHATRAPATI SHIVAJI dia under which the governmentowned company would contribute 10% of the fund as a co-investor. “We got many proposals from funds, out of which 35 proposals were recommended by the VCIC to our executive committee. We have already approved 30 of the proposals worth .₹ 1,000 crore,” Shivaji said.
The proposals are from venture funds such as IvyCap Ventures, Blume Ventures and Exfinity Venture Partners. SIDBI will provide these funds about 15- 20% of their total investment in startups. The remaining amount will be mobilised by venture funds from private capital and other investors, Shivaji said. “These funds will be invested to start up units. Primarily, our aim is to nudge them to make investments in the seed stage because that is when they need the maximum support,” he said. The government launched the India Aspiration Fund in August 2015 with the intention of providing equity investments to startups and micro and small enterprises and boosting employment.
In January, Prime Minister Narendra Modi announced an additional .₹ 10,000 crore to support startups, which will be funded on an annual basis with .₹ 2,500 crore. He also announced a tax holiday, simplification of procedures and faster closures for startups.