In February, this year, ET had reported about the government’s intention to launch a ` . 2,000-crore fund of funds to be managed by SIDBI. India’s largest insurance company LIC will be a coinvestor in the IAF. “India is witnessing a startup revolution and to harness the potential of India’s innovators and entrepreneurs a vibrant financial eco system is essential. IAF will system is essential. IAF will play a vital role in this fi nancial ecosystem,“ said Arun Jaitley while ad dressing a function in Mumbai. The IAF will be managed by an invest ment committee with veterans such as Harkesh Mittal, Secretary Technology Development Board Manipal Global Education Chair man TV Mohandas Pai, Info Edge founder Sanjeev Bhikchandani former Nasscom chairman Kiran Karnik and Indian Angel Network cofounder Saurabh Srivastava.
“This is a very well structured fund and since it’s built on sec toral allocation, it will provide investment to startups in sectors which are not hot today for venture funds but will become hot in future,“ said Sharad Sharma, cofounder of iSPIRT.
Finance Minister Jaitley also launched a new scheme called SIDBI Make in India Loan for Small Enterprises (SMILE) with an alloca . 10,000 crore.tion of ` “The Fund is expected to catalyse tens of thousands of crore of equity investment in startups and MSMEs, creating employment for lakhs of people over the next 4-5 years,“ Jaitley added. The objective of SMILE scheme will be to provide soft loans in the nature of quasi-equity and term loans on relatively soft terms to MSMEs. The loan scheme’s focus will be on 25 sectors under government’s `Make in India’ programme with emphasis on financing smaller enterprises within the MSME sector. “India is expected to surpass the UK in terms of number of startups launched and would be behind only to the US.There is need for more funds that focus on startups and growth stage MSMEs,“ said Minister of State for Finance Jayant Sinha.