The government has set aside Rs. 10,000 crore with Fund of Funds for Startups (FFS) to provide support to start-ups in India, said the FY 2018-19 annual report of Department of Promotion of Industry and Internal Trade. Small Industries Bank of India (SIDBI) manages the FFS.
According to the annual report, FFS does not directly fund start-ups; instead, it contributes to the corpus of Alternate Investment funds (AIFs) for investing in equity and equity linked instruments of various startups.
As per March 2017 revision in guidelines, AIFs are required to invest twice the amount received from FFS in startups. Moreover, they are permitted to make follow on investments in an entity even after it ceases to be a startup, this has helped in achieving quicker offtake, said the annual report.
As on March 31, 2019, SIDBI has already committed close to Rs 2,265.70 crore to 40 AIFs.