Japan's Govt & Firms including Mizuho Bank, Suzuki to Infuse $140 Mn in 100 Indian Startups

India and Japan are jointly launching a $187 million (Rs 1,298 crore) startup fund-of-funds (FoF) to invest in over 100 technology startups in India with focus on ventures working in the fields of Internet of Things (IoT) and Artificial Intelligence, reported Nikkie Asia.

The fund is an outcome of a deal between Japan and India sealed in October last year, in which the countries agreed to cooperate on a broad range of projects related to business, technology and human resources.

According to an another report on same, by VCCircle, the corpus of upcoming FoF called "Indo-Japan Emerging Technology & Innovation AIF" is $187 million (Rs 1,298 crore), of which $150 million will be raised from Japanese investors while the remaining will be raised from Indian investors.

The upcoming FoF, which expects the first close by September this year, aims to invest in more than 200 Indian companies focssed on emerging areas such as Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), fintech, healthcare, consumer, education, robotics, automation and business-to-business (B2B) software, said the VCCircle report.

Four Japanese firms - Mizuho Bank, Development Bank of Japan, Nippon Life and Suzuki Motor -- have already signed letters of intent for the FoF.

Reliance Nippon Life Asset Management Ltd (RNAM), the Indian asset management arm of Nippon Life, will manage the FoF.

In addition, the Indian government will send specialists for advising the FoF on investment targets. These specialists will have knowledge about local startups in India.

A year back, Japan's Ministry of Economy, Trade and Industry, Japanese External Trade Organisation (JETRO) in association with India's Nasscom and IIM, Bengaluru on Monday launched an office and Indo-Japan Startup Hub in Bengaluru in order to support Japanese companies' local operations. Japanese govt plans to use this office to arrange cooperation between Japanese companies and startups that will be backed by the fund.

Just a couple of days back, Japan's NTT Data, a Fortune 500 company, has invested an undisclosed amount of funds in Pune-based CloudHedge Technologies.

Recent Japan-based Activities within Indian Startup Ecosystem

Earlier this month, Tokyo-based internet services firm, Rakuten Inc., launched Rakuten Social Accelerator, its social innovation initiative, in Bengaluru. Rakuten Social Accelerator is a collaboration program that brings together social entrepreneurs, not-for-profit organizations and Rakuten employees, each with a social mission to tackle critical issues facing society today using technologies and business assets.

In this month only, Japan's highly regarded entertainment company Akatsuki Inc's Entertainment Technology Fund, AET, announced that it is looking to invest $500,000 each in five new early-stage startups in India that falls under vernacular category.

Recently, India’s premier bio-innovation hub, Centre for Cellular and Molecular Platforms (C-CAMP), has signed an Letter of Intent (LOI) with Beyond Next Ventures (BNV), a Tokyo-based venture capital firm and one of the leading independent accelerators in Japan dedicated to incubation investment in technology start-ups, to fund and mentor the best deep science innovations in the field of Life Sciences and Biotechnology in India.

In April, Japan's venture capital fund, Incubate Fund announced that it is setting up a $27 million India dedicated fund by the end of 2019, for investing in promising Indian startups.

To recall, in last August, Japanese payments firm Anypay, invested an undisclosed amount in India's on-demand payments and e-commerce platform, Instamojo. Besides, Softbank is already dominating as an investor in most of the unicorn startups in India.

Tamil Nadu to Set Up ₹250 Crore Startup Fund of Funds

The Tamil Nadu government will set up a startup fund of funds (FoF) with a corpus of Rs 250 crore for investments in startup ventures, said the new Tamil Nadu Startup and Innovation policy 2018-2023 unveiled yesterday by the state Chief Minister K. Palaniswami.

Called as Tamil Nadu Startup Fund of Funds, the first tranche of Rs 25 crore will be allotted in the financial year 2019-2020 and the FoF will be managed by a professional financial agency like the Small Industries Development Bank of India (SIDBI), said the policy, which aims to provide an enabling, innovative ecosystem in the state and hopes to support emergence of at least 5,000 technology startups.

According to the policy, "It will be registered as an Alternative Investment Fund (AIF) under Securities and Exchange Board of India (SEBI) regulation, 2012. The fund will be invested in other SEBI registered AIFs for investment in Startups and MSMEs established in Tamil Nadu. Government of Tamil Nadu will invest Rs 75 crore in the fund."

In addition, a Tamil Nadu Startup Seed Grant Fund (TNSSGF) of Rs 50 crore with an allotment of Rs 5 crore in the first year shall be created in partnership with financial institutions and universities for supporting early stage financing requirements of the start-ups in the form of grants to fill the gap in fund requirement for research and innovations.

The TNSSGF would also provide funding for Idea-to-PoC (Proof of Concept) stages which are pre-startup activities.

According to the new policy, the state and central public sector undertakings (PSU) shall be encouraged to adopt incubators and channelize their corporate social responsibility (CSR) funds.

These incubators shall also serve as an innovation sandbox to solve problems faced by the state/central PSUs which, in turn, shall support start-ups with access to platform, test bed, data, hand-holdings and others.

Notably, Tamil Nadu has recently tied with Ministry of Electronics & Information Technology (MeitY) to set up a Centre of Excellence (CoE) for FinTech startups at Software Technology Parks of India (STPI), Chennai.

According to the policy, the following entities would not fall under the startup category -

1. Entities formed by splitting up or reconstruction of a business already in existence,




2. A subsidiary of a firm in the State, except subsidiary of a start-up itself which also qualifies as start-up and the combined entity also satisfies the start-up criteria,




3. A franchisee of an existing business in the state, (d) entities promoted or sponsored by or related to an industrial group in the state whose group turnover exceeds Rs 300 crore.

The policy also hopes to extend a dedicated support to at least 10 global high growth start-ups developing innovative technology solution for high social impact in sectors like sanitation, food, clean energy, healthcare, education and others.

Last month, Tamil Nadu's e-governance agency TNeGA collaborated with IIT-Madras to to contribute towards various aspects of governance, including (but not limited to) education, healthcare, and agriculture, says a press release from IIT-Madras. With this collaboration, the Tamil Nadu is aiming to tap the power of AI, Internet of Things (IoT), Blockchain and drones in addressing the needs of their citizens.

Source - Business Standard (~ IANS)

Kerala Invites Proposal from AIF for its Fund-of-Funds Scheme for Startups

Kerala state government's nodal agency for entrepreneurship development and startup activities, Kerala Startup Mission (KSUM), has invited request for proposal (RFP) from SEBI-accredited alternative investment funds (AIFs) under its ‘Fund-of-Fund’ (FoF) scheme.

Selected AIFs will receive funds from the State Government to invest in the startups from Kerala and thus meet the fund requirements of fledgling technology enterprises.

KSUM has invited the RFP online and the details are available at - startupmission.kerala.gov.in/programs/fof/. Interested AIFs who meet the pre-qualification criteria can submit their expression of interest on or before November 30. After completing the bid process, the final selections will be announced on December 29.

The State Government had launched the Kerala Startup Corpus Fund, a first-of-its-kind initiative in India. A total corpus fund of ₹25 crore was then created with the support of two SEBI-registered AIFs -- Unicorn Ventures India, and SEA Fund. Out of this ₹25 crore, an amount of ₹12.5 crore was contributed by the State Government, and the other half by the two AIFs.

So far, seven investments have been made into startups based out of Kerala, using the Kerala Startup Corpus Fund. One of the startups funded (by Unicorn India Ventures) was Genrobotics, which developed Bandicoot, a robotic system to clean sewers/manholes instead of manual scavenging. Besides, Unicorn India Ventures also made two more investment in Kerala-based startups -- SectorQube and Perfectfit Fashion. The Fund has been actively exploring investment in Kerala post partnering with KSUM.

The objective of the present RFP is to make additional investment into eligible AIFs for supporting exclusively the emerging startups in the State through venture investments, said Saji Gopinath, CEO, KSUM.

More than 200 startups are presently working from KSUM’s five incubation facilities at Thiruvananthapuram, Kochi, Kozhikode and Kasargod.

In September last year, chief executive of the KSUM, Saji Gopinath, had announced that it is targeting a corpus of Rs 500 crore under its FoF scheme over the next three years, which will be for Kerala-based startups.


Source - Business Line

SIDBI Commits ₹200 Crore Under Fund of Funds To 4 AIFs to Help Startup Funding

The Small Industries Development Bank of India (SIDBI) has committed Rs 200 crore under the Government of India's Fund of Funds Scheme (FFS) to four alternative investment funds (AIFs) -- Omnivore Partners India Fund 2, TVS Shriram Growth Fund 3, IQ Alpha III, and Capaleph Indian Millennium SME Fund, according to a tweet by SIDBI's official twitter handle, made on Friday.

#SIDBI Commits Rs 200 crore under #FundOfFunds Scheme of #GovtOfIndia to 4 AIFs (i) Omnivore Partners India Fund 2 (ii) TVS Shriram Growth Fund 3 (iii) IQ Alpha III (iv) Capaleph Indian Millennium SME Fund #FundOfFunds #StartupIndia @DIPPGOI @rabhishek1982 @startupindia

— Small Industries Development Bank of India (@sidbiofficial) July 6, 2018

No further information has been dispelled by SIDBI; not even any official press release from either SIDBI or the Department of Industrial Policy and Promotion (DIPP).

In January 2016, The Government of India estabilished Fund of Funds Scheme (FFS) when in January 2016 the govt. announced it ambitious Startup Action Plan. The FFS was established with a corpus of Rs.10,000 crore, which is to be managed by SIDBI for contribution to various Alternative Investment Funds (AIFs).

This year in April, in an internal mismanage DIPP has blamed its fund manager SIDBI for slow pace of disbursement to startups. Thereafter in following month, DIPP has undertaken before a Parliamentary panel that it will not make any releases to fund manager SIDBI during FY-2018 and FY-2019, due to unspent balances and poor offtake under FFS scheme.

DIPP itself was criticized when a report by a Parliamentary Standing Committee on Commerce said that the DIPP could utilize only 0.4% of Rs 10 crore that were allocated to it for the promotion of 'Start-Up India' scheme in 2017-18.

SIDBI has so far committed about Rs 1,135 crore to 27 local venture capital funds (leaving the four recent ones) under the FFS scheme, of which Rs 141 crore —only about 11 per cent — has been disbursed to these funds till April 2018.
Sidbi had also committed Rs 200 crore under the scheme to three AIFs namely Bharat Innovation Fund, JM Financial Fund II and North Eastern Venture Fund in January this year. Earlier, Sidbi had backed funds such as Pi Ventures, Unicorn India Ventures Fund I, Ankur Capital Stellaris Fund, Menterra Social Impact Fund I and Endiya Seed Co-Creation Fund besides others.

Sidbi is also operating various other fund of funds programmes by investing in MSMEs and start-ups – India Aspiration Fund (IAF) launched formally by Finance Minister Arun Jaitley in August 2015, ASPIRE Fund focused on agri and rural enterprises launched by Jaitley for MSME in 2016, and Rs 200 crore on behalf of LIC.

In May of this year, Bangalore-based retail technology startup Mobisy received funding of Rs 24 crores led by SIDBI Venture Capital Limited (SVCL), a venture capital arm of SIDBI specializing direct and fund of funds.

Omnivore Partners had hit the first close of its second fund, Omnivore Partners India Fund 2, at $46 million with investments from KfW, Sidbi, the Dutch Good Growth Fund, The Rockefeller Foundation, Ceniarth, RBL Bank and the Sorenson Impact Foundation. Omnivore targets to raise a total of $75 million in the second fund and hopes to complete the fund raising by August, it announced on February.

References - DealStreetAsia | SIDBI FFS

SIDBI Commits ₹200 Crore Under Fund of Funds To 4 AIFs to Help Startup Funding

The Small Industries Development Bank of India (SIDBI) has committed Rs 200 crore under the Government of India's Fund of Funds Scheme (FFS) to four alternative investment funds (AIFs) -- Omnivore Partners India Fund 2, TVS Shriram Growth Fund 3, IQ Alpha III, and Capaleph Indian Millennium SME Fund, according to a tweet by SIDBI's official twitter handle, made on Friday.

#SIDBI Commits Rs 200 crore under #FundOfFunds Scheme of #GovtOfIndia to 4 AIFs (i) Omnivore Partners India Fund 2 (ii) TVS Shriram Growth Fund 3 (iii) IQ Alpha III (iv) Capaleph Indian Millennium SME Fund #FundOfFunds #StartupIndia @DIPPGOI @rabhishek1982 @startupindia

— Small Industries Development Bank of India (@sidbiofficial) July 6, 2018

No further information has been dispelled by SIDBI; not even any official press release from either SIDBI or the Department of Industrial Policy and Promotion (DIPP).

In January 2016, The Government of India estabilished Fund of Funds Scheme (FFS) when in January 2016 the govt. announced it ambitious Startup Action Plan. The FFS was established with a corpus of Rs.10,000 crore, which is to be managed by SIDBI for contribution to various Alternative Investment Funds (AIFs).

This year in April, in an internal mismanage DIPP has blamed its fund manager SIDBI for slow pace of disbursement to startups. Thereafter in following month, DIPP has undertaken before a Parliamentary panel that it will not make any releases to fund manager SIDBI during FY-2018 and FY-2019, due to unspent balances and poor offtake under FFS scheme.

DIPP itself was criticized when a report by a Parliamentary Standing Committee on Commerce said that the DIPP could utilize only 0.4% of Rs 10 crore that were allocated to it for the promotion of 'Start-Up India' scheme in 2017-18.

SIDBI has so far committed about Rs 1,135 crore to 27 local venture capital funds (leaving the four recent ones) under the FFS scheme, of which Rs 141 crore —only about 11 per cent — has been disbursed to these funds till April 2018.
Sidbi had also committed Rs 200 crore under the scheme to three AIFs namely Bharat Innovation Fund, JM Financial Fund II and North Eastern Venture Fund in January this year. Earlier, Sidbi had backed funds such as Pi Ventures, Unicorn India Ventures Fund I, Ankur Capital Stellaris Fund, Menterra Social Impact Fund I and Endiya Seed Co-Creation Fund besides others.

Sidbi is also operating various other fund of funds programmes by investing in MSMEs and start-ups – India Aspiration Fund (IAF) launched formally by Finance Minister Arun Jaitley in August 2015, ASPIRE Fund focused on agri and rural enterprises launched by Jaitley for MSME in 2016, and Rs 200 crore on behalf of LIC.

In May of this year, Bangalore-based retail technology startup Mobisy received funding of Rs 24 crores led by SIDBI Venture Capital Limited (SVCL), a venture capital arm of SIDBI specializing direct and fund of funds.

Omnivore Partners had hit the first close of its second fund, Omnivore Partners India Fund 2, at $46 million with investments from KfW, Sidbi, the Dutch Good Growth Fund, The Rockefeller Foundation, Ceniarth, RBL Bank and the Sorenson Impact Foundation. Omnivore targets to raise a total of $75 million in the second fund and hopes to complete the fund raising by August, it announced on February.

References - DealStreetAsia | SIDBI FFS

Amid Slow Startup Funding, DIPP Stops Fund Releases To SIDBI Till FY19

Indian government’s Rs 10,000-crore Fund-of-Funds for Start-ups (FFS) -- launched 28 months ago as part of the 'Start-up India' Action Plan to boost startups in the country -- is struggling to perform any better with poor offtake of funds, which are supposed to routed to startups in the country. The Department of Industrial Policy and Promotion (DIPP) has already blamed its fund manager Small Industries Development Bank of India (SIDBI) for slow pace of disbursement to startups.

To recall, last month, a report by a Parliamentary Standing Committee on Commerce said that the Department of Industrial Policy and Promotion (DIPP) could utilize only 0.4% of Rs 10 crore that were allocated to it for the promotion of 'Start-Up India' scheme in 2017-18. Prior to this, it was reported that on Feb 6, only 99 startups have been funded as compared with a total of 6,981 startups recognised by the DIPP.

SIDBI has so far committed Rs 1,285 crore to 27 local venture capital funds under the FFS scheme, of which Rs 141 crore —only about 11 per cent — has been disbursed to these funds till April 2018.

In the consequence of poor offtake under FFS scheme, DIPP is learnt to have undertaken before a Parliamentary panel that it will not make any releases to fund manager SIDBI during FY18 and FY19, due to unspent balances. The decision to impose restriction of funding to the state-owned SIDBI, which manages the FFS and acts as a limited partner in these venture capital funds (also called Alternate Investment Funds or AIFs) that draw capital from the FFS, has been taken by DIPP citing “unspent balance”.

So far, Rs 600 crore has been released by the DIPP to SIDBI, of which Rs 500 crore was released in FY'16 and Rs 100 crore in FY'17.

Under the FFS scheme, the money is routed to startup entities via participating AIFs. SIDBI makes contributions to AIFs that vary between 10 and 20 percent of the target corpus of each AIF while the balance 80-90 percent funds are raised from other contributors for investing in equity and equity-linked instruments of startups. Of the Rs 141 crore disbursed to early-stage ventures till end-April, some 124 start-ups have been reported as beneficiaries.

In a response to DIPP’s undertaking before the House panel that “no releases” of funds is expected during 2017-18 and 2018-19, SIDBI said that alongside the Rs 600 crore that it has received from DIPP so far, it has also got an assurance letter authorizing it “to make further commitments of Rs 1,600 crore to AIFs”.

On the actual withdrawls of funds by AIFs, SIDBI said, "The decisions are entirely on the investment managers of the Funds and SIDBI has little say in their decisions. The disbursements to the AIFs are based on their request for investment in investee companies".

On the slow disbursement of funds (via DIPP) to startups, SIDBI has clarified to Indian Express, saying that, “the funding dynamics of venture capital industry.. is very much different from the normal lending. Under FFS of Rs 10,000 crore, which is a 10-year programme (2 financial cycles of 5 years each) funds are routed to startup entities through AIFs (venture capital funds). SIDBI makes contributions to AIFs which generally vary from 10 – 20 per cent of target corpus of each AIF. Balance 80-90 per cent funds are raised from other contributors (Limited Partners) and an AIF normally takes 1-2 years to raise the targeted corpus of the Fund. After raising the funds AIFs have a window of 4-5 years to find support-worthy start-up deals and to make investment commitments to them. Therefore, actual flow of funds from AIFs to start-up entities may take up to 3-5 years from the time they start raising funds and it is entirely up to the investment managers of these AIFs to select suitable deals and release funds to their selected start-ups which are normally milestone based without any influence of contributors to fund."

The 27 AIFs that have received funds from SIDBI include Mumbai-based early-stage investor Kae Capital and Saha Fund, a venture capital fund focused on women entrepreneurs.

Kae Capital has investments in about 16 startups, including Truebil, a used-car marketplace owned by Paix Technology; peer-to-peer business loan marketplace startup Loanzen; second-hand products marketplace ListUp promoted by Gijutsu Solutions and shopping portal Fynd run by Shopsense Retail Technologies.

Saha Fund’s investment targets include including fitness application Fitternity, online food platform InnerChef and women’s garment venture Kaaryah. Some of the other AIFs are Mumbai-based Orios Venture Partners, early-stage investor Unicorn India Ventures, Ideaspring Capital, Pi Ventures and Stellaris Venture Partners.

SIDBI however said that it expects actual disbursement of another Rs 400-450 crore out of the committed amount to AIFs during the balance period of FY19.

Via - Indian Express | Top Image - PxHere.com

67 Startups Have Received Tax Benefits So Far: MoS Commerce Industry

The Indian government seems to be really committed to its cause of promoting budding entrepreneurs and supporting struggling startups in the country. According to Minister of State for Commerce & Industry C R Chaudhary, the Indian government has already provided tax benefits to 67 startups so far.

It was last year that the Modi government had announced and sanctioned the much awaited Rs 10,000 crore 'Fund of Funds for Startups'. The fund is one of the steps taken by the Central government towards boosting self-employment in the country — a move that is part of a larger initiative, Prime Minister Narendra Modi’s pet project ‘Startup India Action Plan’, which he unveiled himself in the month of January last year.

Addressing the startup India states conference, Chaudhary said, “3,576 startups have been recognised as on September 7 and tax benefits have been given to 67 innovative startups."

According to Department of Industrial Policy and Promotion (DIPP), they selected the 67 startups out of the 671 startups that they were considering for income tax exemption.

Chaudhary also assured that he will ensure that the chosen startups get full support and facilitation from both the centre and state governments. He said, “We are here to support you. Whenever you need any assistance or help, we are there for that."

The minister also took the occasion to encourage budding entrepreneurs in the country to work in areas that have been ignored for long like agriculture, health, animal husbandry and biotechnology.

Speaking at the same conference, DIPP Secretary Ramesh Abhishek also shared the progress various states are making towards realising the Startup India initiative. He revealed that 15 Indian states have already
formulated their startup policies through which they're facilitating the young businesses in their own states. He said, “States are important partners in this exercise" as startups in the country need support in areas like funding, infrastructure and marketing.

Abhishek also revealed at the conference that a total of Rs 1,587 crore funds has been allocated to startups so far. This is separate from the intellectual property related benefits that the government has provided to 639 startups.

In addition to the existing fund, the DIPP is also considering setting up a Rs 2,000 crore credit guarantee fund that would provide funding facilities to startups.