FoF2.0 builds upon FoF for Startups (FFS 1.0) launched in 2016 under Startup India Action Plan enabling access to venture capital for startups across stages and sectors.
- Venture Capital (VC) is an early-stage equity funding that comes with active guidance for startups with high growth expectations.
Key Highlights of the Scheme
- Total corpus: ₹10,000 crore
- Ministry: Ministry of Commerce and Industry.
- Eligibility: Alternative Investment Funds (AIFs) spread across 16th and 17th Finance Commission cycles.
- AIF refers to privately pooled investment vehicle which collects funds from sophisticated investors (Indian/foreign) for investing as per defined investment policy.
- Structure: Scheme will contribute to corpus of SEBI-registered AIFs for investing in equity and equity-linked instruments of ‘startups’.
- Selection process for AIFs: Involves screening by Venture Capital Investment Committee (VCIC) comprising of veterans from startup ecosystem.
- Monitoring and Governance: ‘Empowered Committee (EC)’ chaired by Secretary, DPIIT (Department for Promotion of Industry and Internal Trade).
- Implementation: Small Industries Development Bank of India (SIDBI) [also the implementing agency of FFS 1.0]
- In addition, another domestic IA(s) will be selected for implementation.
- Segmented approach:
- AIFs supporting deep tech: Startups engaged in developing novel solutions addressing complex problems involving longer R&D cycles, higher costs.
- Smaller AIFs (Micro VCs): Supporting early growth stage startups.
- AIFs supporting tech-driven innovative manufacturing startups: Manufacturing-oriented champion sectors under “Make in India”.
- AIFs supporting sector/stage agnostic startups.
