Small Industries Development Bank of India (SIDBI) has allocated ₹1,000 crore fund which will now be distributed among 30 venture capital firms, through government’s India Aspiration Fund. This fund is designed for early stage startups.
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.
“We got many proposals from funds, out of which 35 proposals were recommended by the VCIC to our executive committee. We have already approved 30 of the proposals worth Rs 1,000 crore.” Mr Shivaji mentioned, “These funds will be invested to startup units. Primarily, our aim is to nudge them to make investments in the seed stage because that is when they need the maximum support.”