Government’s Startup India fund leveraged by 17 Venture Capitals

As per the data released by the Small Industries Development Bank of India (Sidbi) and Department of Industrial Policy and Promotion (DIPP), during FY16, 17 Venture Capital funds were sanctioned INR623.5 crore from the INR10,000 corpus created to help fund the startup ecosystem in the country. The VC funds had further invested in 62 start ups from that corpus. The funds include Mumbai-based VCs Kae Capital and Orios Venture Partners, early-stage investor Unicorn India Ventures, Ideaspring Capital, Pi Ventures and Stellaris Venture Partners, among others.

The government has so far released INR600 crore (INR500 crore in March’16 and another INR100 crore in March’17 to Sidbi while the remainder of Rs10,000 crore will be received in tranches till 2025. Technically, a VC fund can raise only up to 30% of its fund corpus from the Startup Fund. The amount is committed by Sidbi after getting approval from an investment committee comprising entrepreneurs, and drawn by the venture capital fund at a later stage as and when an investment opportunity comes up.

Additionally, the government has also relaxed some of the twisted norms to make it easy for the VCs to raise and invest money. The VCs can now invest in the their portfolio firms even after the business ceases to be a startup.