The Fund of Funds for Startups (FFS), launched under Startup India initiative in 2016, has committed ₹7,980 crore to 99 Alternative Investment Funds (AIFs) as of 31 December 2022, Minister of State for Commerce and Industry Som Parkash said on Friday.
In a written reply to a question in Rajya Sabha, the minister said, “As on 31st December 2022, under the Fund of Funds Scheme (FFS) for startups, Rs 7,980 crore has been committed to 99 Alternative Investment Funds (AIFs) and Rs 3,400 crore has been disbursed to 72 AIFs which have in turn made investments of Rs 14,077 crore in 791 startups...As reported by SIDBI, FFS has played an important role in wealth creation, employment generation, inclusive growth and recognition for startups."
FFS was announced with a corpus of ₹10,000 crore. The corpus is to be built up over 14th and 15th Finance Commission Cycles (FY 2016-2020 and FY 2021-2025) through budgetary support by Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry.
“Under FFS, the scheme does not directly invest in startups, instead provides capital to SEBI-registered AIFs, known as daughter funds, who in turn invest money in growing Indian startups through equity and equity-linked instruments," the commerce and industry ministry said in a statement.
Small Industries Development Bank of India (SIDBI) has been given the mandate of operating the fund through selection of suitable daughter funds and overseeing the disbursal of committed capital. AIFs supported under FFS are required to invest at least two times the amount committed under FFS in startups.
“The flagship schemes namely, Fund of Funds for Startups (FFS), Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS) are supporting startups at various stages of their business cycle to enable startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions," the ministry said.
The government also holds annual exercises and programmes including states’ Startup Ranking, National Startup Awards and Innovation Week which play an important role in holistic development of the startup ecosystem.
