The Department of Industrial Policy and Promotion (DIPP,) of India have extended financial support to 75 Indian startups from 17 Alternate Investment Funds under the Funds of Funds initiative. This support is also open for the India Israel Global Innovation Challenge applicants.
The $ 1.5 billion or Rs. 1,000 crores Funds Of Funds Initiative was launched earlier this year to provide funding support for the development and growth of innovation driven startups. The 14th and 15th Finance Commission constituted by the Government of India will raise the funds for the initiative. The objective of the Fund is to provide funding support to the startups. However, Funds of Funds will not invest directly in the selected startups but will participate in the capital invested by SEBI registered venture funds.
The Funds Of Funds for Startups (FFS) was established by the Indian Government in association with the Small Industries Development Bank of India to extend funding support. The initiative would provide support to various Alternative Investment Funds (AIF) registered with the Securities and Exchange Board of India (SEBI.) The FFS corpus has received Rs. 500 crores in 2015 – 2016 and Rs. 600 crores in 2016 – 2017 for dispensation. These startups were identified based on certain criteria listed in line with the Startup India initiative.
So far, DIPP have recognized 4,377 startups out of which 75 will receive extended support from FFS. According to a tweet, over Rs. 300 crores has been invested in startups by the Fund.
One such startup who received financial assistance from the FFS is the financial services company ftcash. The Mumbai based startup seeks to empower micro merchants and small and medium sized enterprises by allowing them to accept digital payments and loans.
DIPP has launched several such initiatives to accelerate the growth of startups in India. Recently, former Commerce Minister, Nirmala Sitharaman, launched the Startup India Virtual Hub, an online platform for all stakeholders of the entrepreneurial ecosystem in India, to discover, connect and engage with each other. In the Union Budget for 2017-2018, Rs. 1 lakh was also allocated to the FFS by the Center. Finance Minister Arun Jaitley also increased the period of profit linked deductions available to the eligible startups to seven years in the current Union Budget.