“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. The AIFs have suggested specific funds for the sunrise and new-age sectors.
Issues like capital mobilisation and promoting funding for startups in smaller cities were also discussed during the meeting.
The FFS was approved and established in 2016, with a corpus of Rs 10,000 crore, with contribution spread over the 14th and 15th Finance Commission cycle based on progress of implementation, to provide the much-needed boost and enable access to domestic capital.
The scheme has been established to catalyze venture capital investments and is operationalized by Small Industries Development Bank of India (SIDBI), which provides capital to Securities and Exchange Board of India (SEBI)-registered AIFs, which in turn invests in startups.
Among the prominent AIFs of leading startup 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 startups.
As on October 31, 2024, a total of Rs 20,572.14 crore has been invested by the FFS-supported AIFs in startups. These AIFs have committed to invest Rs 1 lakh crore.
With an intent to build a strong ecosystem of the country for nurturing innovation and promoting startups, the government launched the Startup India initiative on January 16, 2016.
As per government’s eligibility conditions, entities are recognized as ‘startups’ under the Startup India initiative by the department. As on October 31, 2024, a total of 1,52,139 entities have been recognised as startups across more than 55 industries.
These units are eligible to avail tax and non-tax incentives.
Of these, over 46,000 entities have been recognised as startups across various technology and allied industries which may include deep-tech such as Artificial Intelligence (AI), biotechnology, nanotechnology, robotics, technology hardware, and Augmented Reality/Virtual Reality (AR/VR) amongst others.
The government under the Startup India initiative, through its flagship schemes namely, Fund of Funds for Startups (FFS), Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS), has provided financial assistance to eligible recognised startups across sectors and through various stages of their business cycle.
As of October 31, 2024, a total financial assistance of over Rs 21,000 crore has been mobilized through these flagship schemes.
