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The Small Industries Development Bank of India (SIDBI) recently authorized ₹1,000 crore fund which will now be distributed among 30 venture capital firms, through government’s India Aspiration Fund.

The amount was approved by the SIDBI executive committee from ₹1,416 crore approved by its independent advisory venture capital investment committee earlier.

SIDBI’s Chairman Kshatrapati Shivaji said that it will take around 12 to 18 months for the money to reach startups as due diligence takes time. He further said that as this is a long term process of around 10 to 12 years, VC firms will have to scout for best companies which will take time for closure.

A couple of months ago, SIDBI had cleared around Rs. 930 crore from its Rs. 2,000 crore fund that was launched in August 2015 in order to help venture capital firms.

In January 2016, Prime Minister Narendra Modi announced an additional Rs 10,000 crore fund to support startups, which will be funded on an annual basis with Rs 2,500 crore.

Commenting about the same, Shivaji said:

The Small Industries Development Bank of India (SIDBI) has set aside Rs 2,000 crore for a fund-of-funds to pick-up equity in startups under the Rs 10,000-crore corpus announced in the Budget. It plans to use a part the remaining Rs 8,000 crore of the budgetary allocation to extend soft loans to micro, small and medium units at concessional rates.

April -22-2016 (RK)

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