Towards startup promotion and growth, in her budget speech for the year, on 01/02/2025, the Union Finance Minister had announced the setting up of a new ‘Fund of Funds’ with fresh contribution of Rs 10,000 crore. This is in addition to already existing contribution of Rs 10,000 crore. Being a ‘fund of fund’ this will go into as contribution to alternate investment funds (AIF) across the country, towards specific startup funding purposes. This is a good move as the union Government’s contribution, executed through SIDBI, will combine with equivalent or more contributions from other funding bodies and thus the overall funds available for startups in India could be much larger.
Considering the fact that Startup funding in India had come down drastically in the last 2 years, this could boost up the funding possibilities for startups. This is good news for many startups who are in startup to standup & standup to scaleup phase of their existence.
With specific reference to Kerala, we see is reduced commitment of SIDBI towards the state. The SIDBI’s setup in Kerala had been scaled down to a great extent which reflects much lesser commitment of SIDBI to the state. On the other hand, hard pressed for capital, GoK and its institutions such as KSUM, KSIDC etc are not in a position to avail such union government schemes due the sheer incapability of offering matching funds. Therefore how much of the union budget announcement will help Kerala startups, is a mute question. Just see the fact below:
In the earlier announced Fund of Fund scheme worth INR 10,000 Crores, 144 VC Funds that got sanction from SIDBI.These VCs committed INR 86000 Crores of which Fund of Funds contribution is only 11147 cr. Active private sector VCF is the reason for such huge participation. How ever, there was not even a single VC in the above list from Kerala. In Kerala, nobody, neither government nor private sector, is interested for such initiatives.
In the freshly announced Funds of Funds worth INR 10,000 Crores, I am not sure how many governmental & private funds from Kerala would participate. When the government had done well in Startup ecosystem building in Kerala for the last 10 plus years, if they do not avail such union budget benefits, it would not only be a big opportunity loss but also a gross disservice to the startups that it helped create.
With such (lack of) nurturing, what would the plight of Kerala Startups?
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