On February 9, 2024, the Small Industries Development Bank of India (SIDBI) has unveiled the CRISIL’s impact assessment report of the Fund of Funds for Startups (FFS) namely ‘Prabhaav‘.
Key People:
Sivasubramanian Ramann, Chairman & Managing Director (CMD), SIDBI, along with Satya Prakash Singh, Chief General Manager (CGM), Venture Finance and Investment Vertical, SIDBI, presented the report to Dr Vivek Joshi, Secretary, Department of Financial Services (DFS), Ministry of Finance; Rajesh Kumar Singh, Secretary, DPIIT (Department for Promotion of Industry and Internal Trade), Ministry of Commerce & Industry (MoCI), among others.
Note: CRISIL, formerly Credit Rating Information Services of India Limited, is a global analytical company that provides ratings, research, and risk and policy advisory services.
Key Highlights:
i.As of November 30, 2023, 129 Alternative Investment Fund (AIF) were sanctioned out of FFS across various segments.
ii.Investments of approximately 4 times the drawn amount, totaling Rs 17,534 crore, have been made in 938 startups, showcasing a significant multiplier effect of FFS.
iii.Despite its focus on early-stage funding, 18 startups supported by FFS have achieved unicorn status.
iv.FFS has directed investments into emerging sectors like deep tech, agriculture, health tech, financial services, and sustainability.
v.Post-FFS launch, 129 startups outside Tier 1 cities received investments totaling Rs 1,590 crore.
- There is also increased support for women-led startups and fund managers.
vi.CRISIL survey finds 89% respondents crediting FFS support for facilitating their fundraise.
vii.Over 75% respondents note a positive effect on raising non-institutional domestic capital post commitment by SIDBI under the scheme.
About FFS:
i.The Fund of Funds for Startups (FFS), launched in 2016, is a flagship program of the Startup India Action Plan.
ii.DPIIT is the monitoring agency and SIDBI is the operating agency for FFS.
iii.FFS was approved with a corpus of Rs 10000 crore with contributions spread over 14th & 15th Finance Commission cycle.
iv.FFS provides capital to Securities and Exchange Board of India (SEBI)-registered AIFs, known as daughter funds, which invest in growing Indian startups through equity and equity-linked instruments.
Key Points:
i.AIFs supported under FFS must invest at least twice the FFS commitment in startups.
ii.FFS reduces reliance on foreign capital, promotes domestic funding, and boosts domestic Venture capital (VC) funds.
iii.FFS contributes to category I & II AIFs, making India the 3rd largest startup ecosystem globally.
- Karnataka has the maximum number of startups supported under FFS i.e. 240 with Rs 4,687 crore investments.
- It is followed by Maharashtra at 2nd (176 startups with Rs 3,426 crore invested), and Delhi at 3rd (138 with Rs 2,254 crore invested).
Recent Related News:
i.India Post Payments Bank (IPPB) has signed an agreement with SIDBI to extend financial and other support services to MSMEs (Micro, Small & Medium Enterprises) in rural and remote areas.
ii.Startup Odisha, an initiative of the Micro, Small & Medium Enterprises(MSME) Department of the Odisha government, launched “Odisha Startup Growth Fund (OSGF)” worth Rs 100 Crore in collaboration with SIDBI.
About Small Industries Development Bank of India (SIDBI):
Chairman & Managing Director– Sivasubramanian Ramann
Headquarter– Lucknow, Uttar Pradesh
Establishment– 1990
