The Fund of Funds for Startups (FFS) scheme has changed the landscape of startup funding in India and it has made a huge difference in the startup ecosystem, said Sanjeev Bikhchandani, Co-founder and Executive Vice Chairman, Info Edge.
The Centre created the FFS scheme in 2016 with a corpus of Rs 10,000 crore to provide a much-needed boost to the Indian startup ecosystem and enable access to domestic capital.
The scheme does not directly invest in startups, but instead provides capital to SEBI-registered Alternative Investment Funds (AIFs), known as daughter funds, who in turn invest money in growing Indian startups through equity and equity-linked instruments.
"I served in the committee for the first two years, the investment committee. To my mind, that single act (introduction of fund of funds) of the government was ground-shifting and groundbreaking. I mean, it was something which altered the landscape," said Bikhchandani, who is also part of the organising committee of the Startup Mahakumbh, set to kick off here in Delhi on Monday.
"That's a big deal. It may not have been direct government funding, may have been indirect from other recipients, but it was that Rs 10,000 crores in the government sanction that made a huge difference," he explained.
Further, sharing a personal anecdote, he said how difficult it was in the 1990s to get access to funds.
"I quit my job and became an entrepreneur in 1990. In 1992, I struggled for six months to get a Rs 30,000 OD (overdraft) limit from a nationalised bank. I think the environment has completely changed. So, you know, I would hesitate to sort of be so negative about it," he responded to a reporter on a question about funding to startups.
"Many positive things have happened, and that's great, especially in the last 10 years. The last point I want to make. See, I graduated from college in 1984 and began to work in an advertising agency in Delhi. And if I look back to the business environment then and now, there's been a sea change. It's not been a revolution, it's been an evolution," he further said.
"If you look at all the sectors which have created employment, attracted investment, got the buzz, these are sectors and in companies that did not even exist in 1984 or barely existed."
Meanwhile, over 1,000 startups, more than 500 incubators, hundreds of investors and delegations from over 10 different countries will assemble for a three-day mega startup event 'Startup Mahakumbh,' set to kick off in the national capital on Monday.
Organisers said on Sunday that this event will now be an annual affair. Being organised at the Bharat Mandapam, this event will be a first of its kind in terms of vision and magnitude. Key global and Indian stakeholders such as unicorn startups, global and domestic venture capitalists, corporates, and industry leaders will also participate. (ANI)