ET BureauIn a brief interview with Kshatrapati Shivaji, Chairman, Sidbi, ET talked about the present scenario where startups are blossoming.
Some industry experts say the allocation of Rs 500 cr for 2015-16 and Rs 600 cr for 2016-17 is lower than what is needed. Out of Rs 10,000-crore fund announced by the Prime Minister in the Startup India Action Plan, Rs 500 crore has been released during FY 2016 and Rs 600 crore is scheduled for release in FY 2017.
These will be fully utilised for the Fund of Funds for Startups. Sidbi contributes a maximum of up to 25 per cent of the corpus and the venture funds would in turn raise funds from other sources, including from abroad, such as high net worth Individuals (HNIs), corporates, other institutions. The corpus, so pooled, will be invested in startups by way of equity and equity-linked instruments.
These investments by the funds will happen over a period of 5- 6 years. Therefore, given the allocation so far under Fund of Funds for Startups, substantial contributions has to be arranged from other sources by the VCFs. Based on need and appetite, SIDBI will make all possible efforts to catalyse enough funds for startups.
Can the government take the call as to which sectors these funds are directed to? Internationally, startups have been supported through government-backed funds, Fund of Funds model is considered ideal with minimal contribution from government and the remaining contribution mobilised from private sources.
Innovative technologies are being seen in different sectors viz., healthcare, education, IT, agritech/agri-business, lifestyle. It would not be appropriate for the government to direct the Fund of Funds to invest in sector-specific funds, but would be better to be sectoragnostic.
Do you make direct investments in startups? Sidbi does not generally make direct investments in startups. But, startup ventures which are grounded and which have achieved revenue traction need venture debt. Hence, Sidbi as part of its initiative to build up a market for venture debt extends debt assistance to startup units, selectively.
Sidbi’s wholly owned subsidiary - Sidbi Venture Capital (SVCL) invests in startups and the venture funds which are supported by SIDBI invest directly in startups. The major startup focused funds are India Quotient, Ivycap, Blume Ventures, Orios Venture Partners and Yournest Angels.
Some industry experts say the allocation of Rs 500 cr for 2015-16 and Rs 600 cr for 2016-17 is lower than what is needed. Out of Rs 10,000-crore fund announced by the Prime Minister in the Startup India Action Plan, Rs 500 crore has been released during FY 2016 and Rs 600 crore is scheduled for release in FY 2017.
These will be fully utilised for the Fund of Funds for Startups. Sidbi contributes a maximum of up to 25 per cent of the corpus and the venture funds would in turn raise funds from other sources, including from abroad, such as high net worth Individuals (HNIs), corporates, other institutions. The corpus, so pooled, will be invested in startups by way of equity and equity-linked instruments.
These investments by the funds will happen over a period of 5- 6 years. Therefore, given the allocation so far under Fund of Funds for Startups, substantial contributions has to be arranged from other sources by the VCFs. Based on need and appetite, SIDBI will make all possible efforts to catalyse enough funds for startups.
Can the government take the call as to which sectors these funds are directed to? Internationally, startups have been supported through government-backed funds, Fund of Funds model is considered ideal with minimal contribution from government and the remaining contribution mobilised from private sources.
Innovative technologies are being seen in different sectors viz., healthcare, education, IT, agritech/agri-business, lifestyle. It would not be appropriate for the government to direct the Fund of Funds to invest in sector-specific funds, but would be better to be sectoragnostic.
Do you make direct investments in startups? Sidbi does not generally make direct investments in startups. But, startup ventures which are grounded and which have achieved revenue traction need venture debt. Hence, Sidbi as part of its initiative to build up a market for venture debt extends debt assistance to startup units, selectively.
Sidbi’s wholly owned subsidiary - Sidbi Venture Capital (SVCL) invests in startups and the venture funds which are supported by SIDBI invest directly in startups. The major startup focused funds are India Quotient, Ivycap, Blume Ventures, Orios Venture Partners and Yournest Angels.
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