In an effort to foster innovation in the nation, alternative investment funds (AIFs) have asked the government for specialized funding to invest in deep-tech, new-age, and sunrise startups, an official stated.

Additionally, they have pushed for the government to launch a new funding round for the Fund of Funds for Startups (FFS) program. AIFs and representatives of the Department for Promotion of Industry and Internal Trade (DPIIT) met here last week, and during the meeting, these demands were brought up.

According to the Official, the department and AIFs had discussions about how to encourage funding for startups in the nation. The official continued, "AIFs requested additional funding under FFS during the meeting. They asked that the current 12-year FFS be extended to 15 years."

The Fund of Funds for Startups (FFS) currently operates across various sectors without any specific focus. However, Alternative Investment Funds (AIFs) have proposed creating dedicated funds targeting emerging and sunrise industries.

During a recent meeting, key issues such as capital mobilization and boosting funding for startups in smaller cities were also discussed.

Established in 2016, FFS was launched with a corpus of Rs. 10,000 crore to catalyze venture capital investments and improve access to domestic capital. The scheme’s contributions are spread over the 14th and 15th Finance Commission periods, depending on the progress of its implementation.

The FFS is managed by the Small Industries Development Bank of India (SIDBI), which provides funding to Securities and Exchange Board of India (SEBI)-registered AIFs. These AIFs then invest in startups across various sectors.

Some prominent AIFs supported under FFS include Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, Aavishkaar, JM Financial, and Fireside Ventures.