STARTUP-STORIES
Snapdeal Founder Urges Government to Ramp Up Financial Backing for Startups Amidst Economic Growth
SUMMARY
Indian startup founders are calling for a significant increase in government funding for the startup ecosystem. Kunal Bahl, co-founder of Titan Capital, suggests boosting the annual corpus of the Fund of Funds for Startups (FFS) scheme to Rs 5,000-10,000 crore.
Industry leaders are also urging for more domestic investment in startups. Infosys co-founder S. Kris Gopalakrishnan recommends a target allocation of at least 15% from domestic sources like family offices and fund managers. The government is reportedly exploring ways to reduce investment risks for local pension funds and insurers, potentially increasing their participation.
Calls for increased government support for Indian startups have emerged amidst concerns about a funding slowdown in the ecosystem. Here's a breakdown of the key points raised by industry leaders:
Need for Increased Capital:
- Kunal Bahl, co-founder of Titan Capital and founder of Snapdeal, highlighted the importance of creating a domestic pool of capital for new-age businesses.
- He lauded the government's Fund of Funds for Startups (FFS) scheme but emphasized its limitations due to a smaller corpus.
- Bahl suggests a significant increase in annual funding for FFS, potentially to Rs 5,000-10,000 crore, to fuel the ecosystem's growth.
Focus on Domestic Investments:
- Infosys co-founder S. Kris Gopalakrishnan emphasized the need for increased investment from domestic sources like family offices and fund managers.
- He expressed concern about the high percentage of ownership (80-90% beyond Series C) held by foreign funds in successful Indian startups.
- Gopalakrishnan suggests a target allocation of at least 15% of investments from domestic sources towards the startup ecosystem.
Government Initiatives:
- The government is reportedly considering measures to encourage local participation in startup funding.
- These measures include a framework to reduce investment risks for pension funds and insurers, and potential expansion of existing support schemes like FFS and Startup India seed funding.