Commerce and industry minister Piyush Goyal on Friday called upon global venture capital (VC) funds to step up their focus on start-ups from Tier-2 and Tier-3 cities and consider greater capital infusion, including that of risk capital, into them.
At a roundtable with VC funds, Goyal held deliberations with over 75 of them, who are based out of the US, Japan, Korea, Singapore and India, and together manage assets worth $30 billion in the Indian region alone.
As many as 45% of the 61,000 start-ups recognised by the department for the promotion of industry and internal trade (DPIIT) come from Tier-2 and Tier-3 cities. They need huge funding support, which can’t be extended by just traditional investment channels.
According to industry estimates, the Indian start-up eco-system raised a record $42 billion in 2021 from various sources, but most of the funds were grabbed by those in top cities.
Goyal also impressed upon the VC funds to go beyond the traditional sectors and invest in new and emerging sectors for investment, promote intellectual property created by the young Indian entrepreneurs and provide expertise to scale up their operations.
The government has already undertaken 49 regulatory reforms for start-ups to enhance the ease of doing business, ensure ease of raising capital and reduce compliance burden.
The roundtable was held through video conference as part of the Startup India Innovation Week. The discussion covered topics, including ‘building for the world from India’, ‘digital India outlook’, ‘regulatory updates for global and domestic funds’ and ‘India opportunity and how policies have shaped up the ecosystem’. It was also attended by DPIIT secretary Anurag Jain and key regulators.