As the market valuations of technology companies skyrocket around the world, Commerce and Industry Minister Piyush Goyal said on Wednesday that the second fund for startups that is being finalised will provide Indian deep-tech companies resources to grow without coming under pressure to cede equity to foreign investors at an early stage.
“Our second Fund of Funds we are hoping to dedicate entirely for deep tech investment, particularly early stage investments so that our friends from deep tech ecosystem do not end up selling large part of their equity at very early stage to funds or Venture Capitalists, to foreign funds,” the minister said at the TiEcon Delhi-NCR.
With the early support from the fund the deep tech startups will be “able to maintain a large part of their ownership for future rounds and for maturing their technology going forward.”
“If you look at the huge valuations that technology companies are receiving worldwide. We will understand the power of our ability to make India a great nation will increase manifold as we engage with new age technologies,” he added.
In this year’s budget the government had announced a new Fund of Funds, with expanded scope and a fresh contribution of another Rs 10,000 crore. With the support of an earlier fund of similar size, the Alternate Investment Funds (AIFs) for startups received commitments of more than Rs 91,000 crore. Details of the new fund are being worked out.
Goyal said it is vital for India to develop its own technologies and reduce over-dependence on certain geographies for key inputs. He said that India has resolved as a nation to move away from being just the back office or software provider of the world and to emerge as a global engine of innovation that drives new ideas, products, and technologies for the future.
This decade in fact has given us several wake up calls, starting from COVID how important it is to have resilient supply chains, to have your own technologies, control over technologies, control over essential supplies in critical areas.