India's apex development financial institution owned by the government, National Bank for Agriculture and Rural Development (NABARD), has launched ₹ 700 crore ( ~ US $100 million) venture capital fund for equity investments in agriculture and rural -focused startups.

Established in July 1982 and fully owned by Government of India, NABARD has been contributing to other funds till now and this is the first time that NABARD, through its subsidiary 'NabVentures', has launched a fund of its own, reported Business Line.

The VC fund, which already had its first close, will be used for investing across startups engaged in agriculture, food and rural development space.

Launched in January this year as a separate subsidiary of NABARD to support start-ups, NabVentures has a proposed corpus of Rs 500 crore with an option to retain over-subscriptions of Rs 200 crore, called as the greenshoe option or "over-allotment option".

Nabventures is now scouting for equity investments in asset-light, innovative, technology-led start-ups in its focus areas

For its first close, the details of the investments done by NABARAD and other limited partners were not idisclosed yet.

NABARD chairman, Harsh Kumar Bhanwala, said,"The fund will have a high impact as it will provide a boost to investment ecosystem in the core areas of agriculture, food and improvement of rural livelihoods."

In India, more than 50% of the rural credit is disbursed by the Co-operative Banks and Regional Rural Banks (RRBs) and NABARD is responsible for regulating and supervising the functions of Co-operative banks and RRBs. NABARD also provides recommendations to Reserve Bank of India on issue of licenses to Cooperative Banks, opening of new branches by State Co-operative Banks and RRBs.

Regarding NABARD's contribution in Indian startup ecosystem, the bank has contributed Rs 273 crore to 16 alternate investment funds. Aavishkaar Bharat Fund, which had invested ₹40 crore in GoBOLT, a Gurgaon-based logistic tech startup, is backed by NABARD among other investors.

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