The Startup India fund, when launched in 2016 had a disbursal target of ₹3,300-3,500 crore to venture capital. However, as reported by ET, the fund fell short of its capital allocation target by around ₹1,000-1,200 crore.
According to the data with Sidbi (Small Industries Development Bank of India), the Startup India fund had allocated ₹2,265 crore to VC funds at the end of March 2019.
“With the robust pipeline in hand, we don’t foresee any problem in deployment of the corpus under fundof-funds for startups during the current financial year in a much more accelerated way,” a Sidbi spokesperson said.
“The platform relating to the receipt of online application from the funds without any manual intervention is under preparation and will be operationalised during next week,” the spokesperson added.
On the other hand, President Ram Nath Kovind, while addressing the Parliament last week, said that the government wants to create 50,000 startups by 2024.
Besides, the BJP (Bharatiya Janata Party) had announced, in its election manifesto that it will creat ₹20,000 crore seed fund to boost early stage statups. Albeit, after the deficit in the allocation, there is no further announcement on the new fund for seed stage funding from the government.
Whereas, earlier in June, the government was planning tax sops for startups with regards to the employee stock option programme (ESOP) in the budget next month.
Sidbi also had plans to cut the overall timeline for VCs to apply and finally get the capital to invest in startups. It typically takes about 4-5 months for a VC to apply and get the approval for capital.