HDFC Bank, the second largest private sector bank in India, is now focusing on the startups and has now launched a startup fund with an initial corpus of around ₹195 crore ($30 million). It is aimed at helping promising new companies to raise capital.
A source aware of the development says:
It’s a dynamic fund and the objective is very clear — start small but keep scaling up. As we understand the ecosystem, we will grow it. The government announced a large fund a few years ago but deployment takes time. If there is a right fit with the bank, we will go ahead and fund the startup.
While the bank has not officially announced or confirmed anything, sources says that the bank is already working with over 150 startups and it thought that a fund was the missing piece in the puzzle.
The development comes just days after the bank extended its SmartUp Zones initiative to Bengaluru. The SmartUp Zones have dedicated banking zones within a specific area inside the branch which deals with the activities and interests of startups. Over the next few years, the HDFC Bank is planning to launch SmartUp Zones in 65 of its branches across 30 cities, including tier II and tier II cities.
With such initiatives, the bank is hoping to offer tailor-made banking solutions, in addition with legal and financial advice as well as mentoring by internal and external experts.
According to estimates, there are around 20,000 startups in the country with those in the technology space expected to double to around 11,000 by 2020.