In 2016, Prime Minister Narendra Modi launched the Startup India Action Plan, aimed at fostering innovation and entrepreneurship across the country. A key component of this transformative initiative is the Fund of Funds for Startups (FFS), managed by the Small Industries Development Bank of India (SIDBI) on behalf of the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India. Since its inception, FFS has emerged as a game-changing intervention in India’s startup ecosystem, catalyzing growth, innovation, and inclusivity.

Recently, CRISIL, India’s premier analytics company, conducted a third-party assessment of the FFS scheme, unveiling its impact assessment report titled “Prabhaav.” The report, presented by Ramann, Chairman and Managing Director of SIDBI, along with S P Singh, CGM Venture Finance, highlights the remarkable outcomes and transformative effects of the FFS initiative.

Transforming India’s Startup Landscape
The FFS scheme, designed to contribute to the corpus of Category I & II Alternative Investment Funds (AIFs), plays a pivotal role in providing risk and growth capital to startups. This initiative has been instrumental in propelling India into the ranks of the world’s third-largest startup ecosystem. By fostering a conducive environment for innovation and investment, FFS has become a cornerstone of India’s entrepreneurial journey.

Key Achievements and Impact
The CRISIL impact assessment report underscores the multi-faceted outcomes of the FFS initiative, ranging from capital infusion to diversity and inclusivity in startup funding. As of November 30, 2023, the scheme has sanctioned commitments to 129 AIFs, resulting in investments totaling approximately ₹17,534 crore in 938 startups. This substantial capital inflow has fueled exponential growth and innovation in the startup sector, contributing to job creation, economic development, and technological advancement.

One of the notable highlights of the FFS initiative is its focus on early-stage funding for young companies, with 18 startups already achieving unicorn status. Moreover, the scheme has facilitated investments in emerging sectors such as deep tech, agriculture, health tech, financial services, and sustainability, fostering innovation and diversification.

Promoting Inclusivity and Diversity
A hallmark of the FFS initiative is its emphasis on inclusivity and diversity in startup funding. Beyond Tier 1 cities, 129 startups have received investments totaling ₹1,590 crore, promoting geographical inclusivity and fostering entrepreneurship in underserved regions. Furthermore, the scheme has bolstered support for women-led startups and fund managers, driving gender diversity and empowerment in the startup ecosystem.

Revolutionizing Venture Capital Space
The FFS initiative has revolutionized the venture capital space in India, serving as a beacon of approval for fund managers and investors alike. According to CRISIL’s survey, 89% of respondents affirmed that FFS support was instrumental in anchoring their fundraising efforts, while more than 75% reported a positive impact in raising non-institutional domestic capital post-commitment by SIDBI. Additionally, 35% of supported AIFs are managed by first-time fund managers, enhancing the depth and reach of the AIF/VC funding ecosystem.

Appreciation and Future Endeavors
The Secretary of the Department of Financial Services (DFS) and the Department for Promotion of Industry and Internal Trade (DPIIT) commended SIDBI for its initiatives and progress in managing the FFS scheme. Since its establishment in 1990, SIDBI has been a driving force in fostering entrepreneurship and innovation across India. In addition to FFS, SIDBI manages the ASPIRE Fund of Funds for Agro and Rural enterprises, as well as state-focused Fund of Funds for Uttar Pradesh and Odisha, further expanding its footprint in the startup ecosystem.

The Fund of Funds for Startups (FFS) stands as a testament to the Government of India’s unwavering commitment to fostering innovation, entrepreneurship, and economic growth. Through strategic interventions and partnerships, FFS has propelled India’s startup ecosystem to new heights, empowering entrepreneurs, driving investment, and fostering inclusive growth. As India continues its journey towards becoming a global innovation hub, FFS remains a cornerstone of its entrepreneurial aspirations, catalyzing transformative change and shaping the future of startups in the country.

By Admin

Leave a Reply

Your email address will not be published. Required fields are marked *