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Source- This post on Prabhaav has been created based on the article “Prabhaav: SIDBI unveils the CRISIL study on impact of Fund of Funds on startup ecosystem” published in “Economic Times” on 9 February 2024.
Why in the news?
The Small Industries Development Bank of India (SIDBI) has recently released the CRISIL study report named “Prabhaav”. It assesses the impact of the Fund of Funds for Start-ups (FFS).
About Prabhaav Report
| Introduction | It is a report released by CRISIL to assess the impact of the Fund of Funds for Start-ups (FFS). Fund of Funds for Start-ups (FFS) is a key initiative under the Start-up India Action Plan |
| Dimensions included in assessment | 1) Flow of capital 2) Inclusiveness and diversity in coverage of startups 3) Innovative solution 4) Deepening of startups funding ecosystem in the hinterland of country |
| Key findings of the report | 1) The report reveals that 129 startups beyond Tier-1 cities have received investment worth Rs1,590 crore. 2) Fund of Funds for Startups (FFS) scheme has enabled investments to the tune of around 4x of the amount drawn with Rs 17,534 crore invested in 938 startups. 3) There was increase in support to women led startups as well as women led fund managers. 4) 18 startups have become unicorn. 5) The scheme has also supported start-ups in emerging sectors such as deep tech, agri-tech, health tech, and financial services. |
What is Fund of Funds Scheme?
About– The Fund of Funds for Startups (FFS) Scheme was approved and established in 2016 with a corpus of Rs 10,000 crore.
Funding to start-ups– The Scheme does not directly invest in startups. It provides capital to SEBI-registered AIFs (alternate investment funds) known as daughter funds. These AIFs invest money in growing Indian startups through equity and equity-linked instruments.
Fund operated by– Small Industries Development Bank of India (SIDBI) through selection of suitable daughter funds and overseeing the disbursal of committed capital.
Mandate– AIFs (alternate investment funds) supported under FFS are required to invest at least 2 times of the amount committed under FFS in startups.
NOTE- SIDBI-
1) It was established under an Act of Parliament in 1990.
2) It is responsible for administering the Small Industries Development Fund and National Equity Fund.
UPSC Syllabus-Indian economy.
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