The formulation of guidelines for operationalisation of second Fund of Funds (FFS) for startups is in advanced stages and will be rolled out very soon, Commerce and Industry Minister Piyush Goyal said on Friday.
The second FFS with an outlay of Rs 10,000 crore was announced in the Budget for the current fiscal and is aimed at funding startups in high technology sectors and manufacturing. This is a continuation of the first FFS announced in 2016, the corpus of which has been exhausted.
Focus on Deep-Tech
“Our aims is to make more risk capital available to deep tech startups. There is more risk in it and the startups may get returns after a long time. Keeping such things in mind, we are going to support them through FFS II,” the minister told reporters.
Through the first FFS, investments of more than Rs 25,000 crore have been made. It financed startups largely in the services sector.
The new FFS will be looking beyond equity support for these startups, which can be in the form of debt or other instruments and will have a horizon of more than 10 years.
The budget had also announced FFS for deep tech startups to enable patient capital, support disruptive innovations and for funding of larger ticket size.
Goyal said apart from funding, the government is supporting startups in inventory management through Government e-Marketplace (GeM), where pre-qualification criteria has been simplified. Ministries like defence, electronics, biotech and railways have their own programmes to promote startups. The costs of patent, copyright and trademark applications to startups have also been brought down.
Holistic Handholding
“The whole idea is that as the startup is developing, the government should be there to hand hold them. And we have started the website also through which mentoring is done, finance can be raised, any problems that they face can be flagged off to the StartUp India team,” Goyal added.
In the different components of the Export Promotion Mission (EPM) that are being rolled out, a special carve out has been made available for startups to make them ready for exports, he said.