As of September 24, 2022, Prime Minister Narendra Modi’s Fund of Funds for Startups (FFS), which was established under the Startup India programme in 2016, has committed 7,385 crore to 88 Alternative Investment Funds (AIFs).
The Ministry of Commerce & Industry claims in a statement that these AIFs have in turn invested 11,206 crore in 720 companies.
In the Indian startup ecosystem, the Fund of Funds for Startups, which was announced with a corpus of 10,000 crore, has been mobilising domestic funding. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India, will provide budgetary support for the corpus’ development over the course of the 14th and 15th Finance Commission Cycles (FY 2016-2020 and FY 2021-2025).
Support is provided under FFS to Alternative Investment Funds (AIFs), which are registered with SEBI and invest in start-up companies.
This occurs at a time when investors are losing faith in startups in India, which is anticipated to last for the next 12 to 18 months, according to a report by the market intelligence platform Tracxn. The Indian startup ecosystem saw $885 million in fundraising, 102 funding rounds, and 9 acquisitions in August 2022, which is a 20%, 8%, and 18% decrease from July 2022.
According to the government, the amount committed under FFS has increased significantly over time, exhibiting a CAGR of over 21% since the program’s introduction. The Small Industries Development Bank of India (SIDBI) is in charge of carrying out the program’s operational requirements.
Out of the 88 AIFs supported by Fund of Funds for Entrepreneurs, 67 have been assisted in becoming anchored, and 38 of these fund managers are new, which is consistent with FFS’s primary goal of facilitating venture capital investments for Indian startups.
