The startup ecosystem in Tamil Nadu is likely to get a boost as the Amma Venture Capital Fund, announced by former CM J Jayalalithaa, will soon become operational, said government sources.

With a 200 crore commitment, Amma VC Fund will work along the same lines as the already launched 20-crore biotech incubation centre in Chennai. The Golden Jubilee Biotech Park for Women Society was set up by the department of biology, government of Tamil Nadu, and the M S Swaminathan Research Foundation. The 5,000 square feet incubation centre, set up exclusively for women entrepreneurs, hopes to help 500 women by 2021. “A couple of women entrepreneurs have already received the benefit of working at the centre. We will be identifying more women in the new year,” said the source.

The Tamil Nadu State Finance Ministry has started the groundwork for the fund. “With this initiative, startups will get 1 crore equity funding. It aims at making Chennai emulate the startup ecosystem and culture of Bengaluru,” said the source.

“Funding could be a combination of equity and debt. About 25% of equity capital will be given in the form of subsidy. The other 75% capital requirement could be in the form of debt. This could be loans at a concessional rate as announced in former chief minister J Jayalalithaa’s manifesto,” said the source.

The fund will receive cash inflow from the Centre. “Startup India, Stand up India’ is committed to helping states nurture their own startup culture. This fund could be an ideal vehicle for the Centre’s proposed funding of 10,000 crore. But this is still in the planning stages and we are in talks with the ministry,” said the source.

Source: The Times of India