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Alternate investment funds (AIFs) have sought from the government specific funds for investments in new-age, sunrise and deep-tech startups with a view to promoting innovation in the country, an official said.

They have also urged the government to announce a fresh round of funds under the Fund of Funds for Startups (FFS) scheme.

These demands were raised during a meeting between AIFs and the officials of the Department for Promotion of Industry and Internal Trade (DPIIT) here last week.

The department held discussions with AIFs on ways to promote funding for startups in the country, the official said.

“In the meeting, AIFs demanded more funds under FFS. They demanded an increase in the duration of FFS from the existing 12 years,” the official added.

At present FFS is sector agnostic. The AIFs have suggested specific funds for the sunrise and new-age sectors.

Issues like capital mobilisation and promoting funding for startups in smaller cities were also discussed during the meeting.

The FFS was approved and established in 2016, with a corpus of Rs 10,000 crore, with contributions spread over the 14th and 15th Finance Commission cycle based on the progress of implementation, to provide the much-needed boost and enable access to domestic capital.

The scheme has been established to catalyze venture capital investments and is operationalized by the Small Industries Development Bank of India (SIDBI), which provides capital to the Securities and Exchange Board of India (SEBI)-registered AIFs, which invests in startups.

Among the prominent AIFs of leading startup investment firms supported under FFS are Chiratae Ventures, India Quotient, Blume Ventures, IvyCap, Waterbridge, Omnivore, Aavishkaar, JM Financial, and Fireside Ventures.

AIFs supported under FFS are required to invest at least two times the amount committed under FFS in startups.

As of October 31, 2024, a total of Rs 20,572.14 crore has been invested by the FFS-supported AIFs in startups. These AIFs have committed to invest Rs 1 lakh crore.

With an intent to build a strong ecosystem in the country for nurturing innovation and promoting startups, the government launched the Startup India initiative on January 16, 2016.