The funds which have received Sidbi’s commitment are Orios Venture Partners Fund II (50 crore), Kae Capital (45 crore), and two little known funds, Saha Trust (10 crore) and Kitven Fund III (5 crore), Sidbi disclosed in response to an RTI query from Business Standard. Only 5.66 crore of this has been invested in start-ups till now.
Mohandas Pai, a member of the six-member committee that selects AIFs, said, “The fund of funds has sanctioned more than 2000 crore. The disbursements are around 200 crore as of date. It is typical in a fund of fund structure to start like this and go up the J curve.” It is possible the RTI disclosures don’t capture all commitments made.
The NDA government launched its Start-Up India programme on January 16, 2016 promising to promote and support start-ups in critical areas where existing funding from market was not adequate. One key part of the programme was to set up an Rs 10,000 crore ‘fund of funds’.
The fund was established on June 22, 2016, and Sidbi was asked to manage the funds. The funds were to be invested in SEBI-registered Alternative Investment Funds (AIFs). These AIFs were to invest in start-ups. Kae Capital and Orios Venture are Mumbai-based VC funds headed by Sasha Mirchandani and Rehan Yar Khan, respectively.
Saha Trust is a woman-centric start-up fund that promotes women entrepreneurs. Kitven Fund is run by the government of Karnataka, which aims to promote IT start-ups. Kitven is targeting a corpus of Rs 50 crore while Saha Trust is targeting a corpus of Rs 65 crore.
Sidbi also revealed in its RTI reply to that Life Insurance Corporation (LIC) of India had not contributed any money to the fund till date. According to the original action plan of the government, LIC was to be a co-contributor to the ‘fund of funds.’
Under the original action plan, this ‘fund of funds’ run by a board of private professionals was supposed to provide support to start-ups in manufacturing, health, agriculture and education. But it was decided that the funding through the AIFs would not be restricted to the start-ups that the commerce ministry recognises for other benefits.
AIFs were left free to invest in other start-ups as well. Sidbi selected these AIFs on various criteria – the primary one was that they would be have to invest more than 50 per cent of the corpus given to them in medium and small scale enterprises. One of the other criteria was that the fund manager must be experienced in managing venture funds.
Kae has invested in dating applications like Truly Madly and shopping portal Myntra in the past. Two eye catching investments of this fund in India in the healthcare sector have been in two companies – Healthkart and DailyRounds. While DailyRounds is an information sharing platform for doctors, Healthkart is an online store selling nutritional supplements like body building powders and slimming capsules. In education, it has invested in MapMyTalent, an academic and career counselling website.
Source: SmartInvestor