Fund of Funds for Startups (FFS), a key component of the Startup India Action Plan, a scheme managed by SIDBI. The assessment of this scheme was undertaken by ratings agency CRISIL.
The report indicated that as on November 30, 2023, 129 AIFs were sanctioned commitment out of FFS across segments. The scheme has catalyzed investments to the tune of ~4x of the amount drawn with ₹17,534 crore invested in 938 unique startups. Thus, resulting in multiplier effect, promoting capital flow into this segment. While FFS largely focusses on early-stage funding in young companies, 18 of its startups have already become unicorns.
Emphasizing on diversity and inclusiveness, 129 startups beyond Tier 1 have received investments aggregating ₹1,590 crores. Investments were also directed to emerging sectors, Deep tech, health tech, financial services, being a few. The support to women led startups and fund managers was another promising outcome of the scheme, so they claim.
The scheme has reported to have made way in Venture Capital Space in India too, emerging as hallmark of approval for the fund managers. According to the survey by CRISIL as part of the assessment, 89% respondents confirmed that support under FFS was instrumental in anchoring their fund raise. More than 75% respondents said they experienced a positive impact in raising non-institutional domestic capital post commitment by SIDBI under the scheme. Furthermore, out of the AIFs supported, 35% are being managed by first time Fund Managers, which will help deepen and enhance the reach of the AIF / VC funding ecosystem, as summed up by CRISIL in its assessment.
