Chennai-based Billionaire Venture Incubation and DBS Bank have signed an MoU to facilitate investment in startups through a special purpose vehicle (SPV) formed by this joint venture. The JV will earmark about $200 million in collaboration with DBS Bank to extend capital to around 150 startups in Tamil Nadu, Karnataka and Maharashtra, besides creating thousands of jobs through the initiative.
Subhash Sukumar, board member, Billionaire Venture Incubation, said: “The newly-formed joint venture will earmark about $200 million in collaboration with DBS Bank to extend capital for about 150 startups in Tamil Nadu, Karnataka and Maharashtra initially. Plans are also underway to expand to the northern part of the country.”
The JV will immediately focus on verticals such as fintech, edtech and other critical areas. Besides extending capital, the JV will provide technology and education support to startups.
Charan Kumar, regional segment head, south India, DBS Bank, said: “The JV will facilitate the knowledge sustenance within our country and additional contribution to GDP as more entrepreneurs, including IIT graduates, are eager to promote startups. The encouragement given by both the Centre and state governments in the form of subsidy on investment will also encourage new entrants.”
The system of funding has been designed in such a way to safeguard the JV as well as startups. The JV would waive dividend for the first two years, but will monitor the functioning of startups during that period. If there is disruption in functioning, the JV will take over and transfer the operations to other successful startups, though it will offer profit sharing during the remaining period. This protection in the initial period will attract more startups, Kumar said.