Fueling Innovation: Fund of Funds injects INR 1,590 Cr into startups outside Tier-I cities, fostering growth and inclusivity
n a significant development for India’s startup ecosystem, a recent CRISIL report has revealed that the Fund of Funds initiative has injected capital amounting to INR 1,590 crore into 129 startups located beyond Tier-I cities. This strategic investment underscores a concerted effort to nurture and support entrepreneurial ventures operating in non-metro areas.
Established in 2016 with an initial corpus of INR 10,000 crore, the Fund of Funds initiative has emerged as a crucial financial mechanism aimed at fostering the growth and expansion of startups across various sectors. The initiative focuses on providing capital infusion to startups operating in segments such as deeptech, agritech, healthtech, and sustainability, among others.
Under this scheme, commitments have been sanctioned for 129 alternative investment funds (AIFs), reflecting a diverse array of investment opportunities beyond the traditional Tier-I cities. This strategic allocation of capital reflects a broader trend of decentralization and inclusivity within India’s startup landscape, with a growing emphasis on supporting innovative ventures in smaller cities and towns.
The infusion of funds into startups operating outside Tier-I cities is expected to catalyze economic growth and job creation in these regions, thereby contributing to a more balanced and equitable distribution of entrepreneurial opportunities across the country. Moreover, it serves as a testament to the untapped potential and burgeoning talent pool that exists beyond the confines of major metropolitan hubs.
As India continues to position itself as a global hub for innovation and entrepreneurship, initiatives like the Fund of Funds play a pivotal role in nurturing the next generation of startups and driving socio-economic development across diverse geographies. With concerted efforts to support startups in non-metro areas, the country is poised to unlock new avenues of growth and innovation, ultimately fostering a thriving and inclusive startup ecosystem.
