Indian Economy News

Government commits Rs. 7,385 crore (US$ 904.73 million) under Fund of Funds for Startup India Investment for 88 Alternative Investment Funds (AIFs); 720 startups supported by AIFs

As of September 24, 2022, the Fund of Funds for Startups (FFS), which was established under the Startup India programme in 2016 by Prime Minister Mr. Narendra Modi, has contributed Rs. 7,385 crore (US$ 904.73 million) to 88 Alternative Investment Funds (AIFs). In turn, these AIFs contributed Rs. 11,206 crore (US$ 1.37 billion) to 720 startups. When it comes to raising domestic financing for the Indian startup sector, FFS has been essential.

FFS was announced with a Rs. 10,000 crore (US$ 1.22 billion) corpus. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, will provide budgetary assistance for the corpus' development for 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 startup companies.

FFS has not only provided funding for entrepreneurs in their early, seed, and growth stages, but it has also acted as a catalyst for domestic capital raising, reduced reliance on foreign capital, and the development of new venture capital funds. Since the introduction of the Scheme, the amount committed under FFS has increased significantly, achieving a CAGR of over 21%.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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