Alternate investment funds (AIFs) have sought from the government specific funds for investments in new-age, sunrise and deep-tech start-ups with a view to promote innovation in the country, an official said.
They have also urged the government to announce a fresh round of funds under the Fund of Funds for Startups (FFS) scheme.
These demands were raised during a meeting between AIFs and the officials of the Department for Promotion of Industry and Internal Trade (DPIIT) here last week.
The department held discussions with AIFs on ways to promote funding for start-ups in the country, the official said.
“In the meeting, AIFs demanded more funds under FFS. They demanded an increase in the duration of FFS from the existing 12 years,” the official added.
At present FFS is sector agnostic. AIFs have suggested specific funds for the sunrise and new-age sectors.
Issues like capital mobilisation and promoting funding for start-ups in smaller cities were also discussed during the meeting.
FFS was approved and established in 2016, with a corpus of ₹10,000 crore, with contribution spread over the 14th and 15th Finance Commission cycle based on the progress of implementation, to provide the much needed boost and enable access to domestic capital.
The scheme has been established to catalyse venture capital investments and is operationalised by the Small Industries Development Bank of India (Sidbi), which provides capital to the Securities and Exchange Board of India (Sebi)-registered AIFs, which in turn invests in startups.
Among the prominent AIFs of leading start-up investment firms supported under FFS are Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, Aavishkaar, JM Financial and Fireside Ventures.
AIFs supported under FFS are required to invest at least two times the amount committed under FFS in start-ups.
As on October 31, 2024, a total of ₹20,572.14 crore has been invested by the FFS-supported AIFs in start-ups. These AIFs have committed to invest ₹1 lakh crore.
With an intent to build a strong ecosystem in the country for nurturing innovation and promoting start-ups, the government launched the Startup India initiative on January 16, 2016.
PTI