Government has approved the setting up of Fund of Funds for Startups (FFS) with a corpus of ₹ 10000 crore. ₹ 500 crore have been released in the Financial Year 2015-16 to Small lndustries Development Bank of India (SIDBI) to start its operations and ₹ 600 crore has been earmarked for Financial Year 2016-17. As a Fund of Funds, FFS would not invest directly in Startups, but would participate in the capital of Securities and Exchange Board of India (SEBI) registered Alternate Investment Funds (AIF). FFS is designed to support l8 lakh jobs at full deployment. FFS would be sector agnostic enabling it to support a broad mix of startups set up by all categories of people. The Startup will act as a catalyst to attract private capital by way of equity, quasi-equity, soft loans and other risk capital for start-up companies.

This information was given by Minister of State for Finance Shri. Arjun Ram Meghwal today in reply to a Lok Sabha question.

Fund of Funds for Startups to channel capital through SEBI-registered AIFs and mobilise private risk capital for startups. Government established a Fund of Funds for Startups to be deployed through an implementing agency, with initial budgetary allocations released and further amounts earmarked. The Fund will not invest directly in startups but will subscribe to SEBI-registered Alternate Investment Funds, using that channel to attract private equity, quasi-equity, soft loans and other risk capital into a sector-agnostic startup ecosystem.