Question

How much fund has been announced for startups (FFS) under “Start Ups India”?

• A. 10,000 Cr
• B. 10,00,000 Cr
• C. 1000 Cr
• D. 1,00,000 Cr

Hint:

Do not confuse the Fund of Funds for Startups (FFS), which has a corpus of Rs. 10,000 Crore, with the Startup India Seed Fund Scheme (SISFS), which has a smaller corpus of Rs. 945 Crore.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
To support the "Startup India" initiative launched by the Government of India in 2016, a dedicated funding mechanism was established to address capital requirements for early-stage enterprises.
This funding mechanism operates as a "Fund of Funds," channelled through registered Alternative Investment Funds (AIFs).

Step 2: Detailed Explanation:
The Fund of Funds for Startups (FFS) was established in June 2016 with a total corpus of \(\text{Rs. } 10,000\text{ crore}\).
The key features of this fund include:
- The fund is managed and operated by the Small Industries Development Bank of India (SIDBI).
- Instead of investing directly in startups, the FFS contributes capital to venture capital funds (AIFs) registered with SEBI.
- These partner funds are then required to invest at least twice the amount of FFS contribution into eligible Indian startups.
- This structure leverages private capital, multiplying the total financial support available to the startup ecosystem.
- The fund aims to generate employment, foster innovation, and support entrepreneurship across diverse sectors, including agritech, biotechnology, and software.
The other options, such as \(\text{Rs. } 1,000\text{ crore}\) (which is closer to the Startup India Seed Fund Scheme corpus), are incorrect for the main Fund of Funds.

Step 3: Final Answer:
A fund of 10,000 Crore was announced for the Fund of Funds for Startups (FFS) under the Startup India initiative.