Dr. Kshatrapati Shivaji, IAS, CMD, SIDBI in his statement released to the press yesterday informed that its Venture Capital Investment Committee [VCIC] comprising of external experts including S/Shri Mohandas Pai, Saurabh Srivastava, Sanjeev Bikchandani, H.K.Mittal, Kiran Karnik etc. met on July 12, 2016 to screen 13 proposals from venture funds for possible support investing in MSMEs Startups. VCIC, after extensive deliberations with the Fund Managers in a daylong meeting, recommended 8 proposals for an aggregate corpus support of around `428 crores. These 8 Funds, having a targeted corpus of `3130 crores, would invest in startups as defined under the Startup Action Plan by Government of India.
1. SIDBI is also managing a fund of funds set up by Ministry of MSME with a total corpus of `60 crores under “A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship [ASPIRE]”. During the meeting, VCIC also recommended proposals from three Fund Managers for an additional corpus support of `30 crores for coverage under the ASPIRE Fund. These Funds would support MSME enterprises in the Agro and Rural industry segment.
2. VCIC in its earlier meetings has already recommended proposals from funds focused on startups for an aggregate support of `439 crores (to 12 Funds targeting a total corpus of `3560 crores), out of which, 6 proposals for an aggregate corpus support of `168 crore targeting corpus of `1720 crores) was already sanctioned by SIDBI. Balance six proposals are under different stages of processing for an aggregate support of `271 crores (Funds targeting corpus of `1840 crores). Thus during the current fiscal, including yesterday’s approval by VCIC, cumulatively 20 Funds are likely to be covered for an aggregate support of `867 crores. (Funds targeting corpus of `5690 crores).
3. Dr. Shivaji added that keeping in view the mandate by Government of India under the Start up Action plan and to support the start up eco system, proposals from different fund managers for investing in start ups are increasingly encouraged for support under Fund of Funds Scheme (FFS). It was interesting to note that the focus of the different Funds which were supported include, amongst others, different segments in the startup space viz., internet of things, artificial intelligence, healthcare, consumer media, fintech, data analytics, cyber security, digital media, machine learning, agri-related businesses, etc.
4. Dr. Shivaji, in his statement added that VCIC was really excited with the interest being exhibited by the fund managers in several new areas in the start up space which show promising growth for India in the international arena.
5. It is known that the Cabinet had approved the establishment of FFS with a corpus of `10,000 crore at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF) registered with SEBI which would extend funding support to startups. The corpus is proposed to be built-up over the 14th and 15th Finance Commission cycle subject to approval of the scheme and availability of the funds. He added that under FFS Government has already provided SIDBI with an amount of `500 crore as corpus in FY 2016 and `600 crore has been earmarked for FY 2017. He added that Department of Industrial Policy and Promotion [DIPP] which is the nodal agency for operating the FFS is taking up for further release under FFS. Formal sanction would be made to different Funds depending on the release of corpus by Government of India.
6. In addition to ASPIRE and FFS, SIDBI is also managing India Aspiration Fund [IAF] under which so far 22 funds have been extended an aggregate support of `721.75 crores (funds targeting total corpus of `8445 Crores)
7. SIDBI has so far supported 97 funds in aggregate including 11 regional funds with an aggregate commitment of `2602 crores. Based on drawal of around `1065 crores, so far from the above aggregate commitment, these funds have invested in 714 enterprises with an equity support of `9520 crores out of which `4794 crores were invested in 604 MSMEs.
8. Dr. Shivaji added that SIDBI also offers other risk capital products through mezzanine structures to growth stage startups and added that SIDBI has been constantly orienting and reinventing itself for bringing out product solutions for various needs of SMEs. Its current focus is on stepping up its role in funding startups through its Fund of funds operations in line with national agenda (Start up India Action Plan).
1. SIDBI is also managing a fund of funds set up by Ministry of MSME with a total corpus of `60 crores under “A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship [ASPIRE]”. During the meeting, VCIC also recommended proposals from three Fund Managers for an additional corpus support of `30 crores for coverage under the ASPIRE Fund. These Funds would support MSME enterprises in the Agro and Rural industry segment.
2. VCIC in its earlier meetings has already recommended proposals from funds focused on startups for an aggregate support of `439 crores (to 12 Funds targeting a total corpus of `3560 crores), out of which, 6 proposals for an aggregate corpus support of `168 crore targeting corpus of `1720 crores) was already sanctioned by SIDBI. Balance six proposals are under different stages of processing for an aggregate support of `271 crores (Funds targeting corpus of `1840 crores). Thus during the current fiscal, including yesterday’s approval by VCIC, cumulatively 20 Funds are likely to be covered for an aggregate support of `867 crores. (Funds targeting corpus of `5690 crores).
3. Dr. Shivaji added that keeping in view the mandate by Government of India under the Start up Action plan and to support the start up eco system, proposals from different fund managers for investing in start ups are increasingly encouraged for support under Fund of Funds Scheme (FFS). It was interesting to note that the focus of the different Funds which were supported include, amongst others, different segments in the startup space viz., internet of things, artificial intelligence, healthcare, consumer media, fintech, data analytics, cyber security, digital media, machine learning, agri-related businesses, etc.
4. Dr. Shivaji, in his statement added that VCIC was really excited with the interest being exhibited by the fund managers in several new areas in the start up space which show promising growth for India in the international arena.
5. It is known that the Cabinet had approved the establishment of FFS with a corpus of `10,000 crore at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF) registered with SEBI which would extend funding support to startups. The corpus is proposed to be built-up over the 14th and 15th Finance Commission cycle subject to approval of the scheme and availability of the funds. He added that under FFS Government has already provided SIDBI with an amount of `500 crore as corpus in FY 2016 and `600 crore has been earmarked for FY 2017. He added that Department of Industrial Policy and Promotion [DIPP] which is the nodal agency for operating the FFS is taking up for further release under FFS. Formal sanction would be made to different Funds depending on the release of corpus by Government of India.
6. In addition to ASPIRE and FFS, SIDBI is also managing India Aspiration Fund [IAF] under which so far 22 funds have been extended an aggregate support of `721.75 crores (funds targeting total corpus of `8445 Crores)
7. SIDBI has so far supported 97 funds in aggregate including 11 regional funds with an aggregate commitment of `2602 crores. Based on drawal of around `1065 crores, so far from the above aggregate commitment, these funds have invested in 714 enterprises with an equity support of `9520 crores out of which `4794 crores were invested in 604 MSMEs.
8. Dr. Shivaji added that SIDBI also offers other risk capital products through mezzanine structures to growth stage startups and added that SIDBI has been constantly orienting and reinventing itself for bringing out product solutions for various needs of SMEs. Its current focus is on stepping up its role in funding startups through its Fund of funds operations in line with national agenda (Start up India Action Plan).
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