SIDBI Partners with Bihar Startup Fund Trust to Enhance Startup Ecosystem
In a significant move to bolster the startup ecosystem in Bihar, the Bihar Startup Fund Trust, under the Department of Industries, Government of Bihar, has forged a partnership with the Small Industries Development Bank of India (SIDBI).
Objective of the Partnership
The primary objective of this partnership is to administer the Bihar Startup Scale-up Financing Fund (BSSFF), amounting to Rs 50 Crore. This initiative marks a crucial step towards transforming Bihar into a vibrant startup hub.
Creating a Nurturing Environment for Startups
The collaboration aims to cultivate a nurturing environment for startups in Bihar, with a key focus on fostering innovation to address complex challenges faced by the Indian economy and society.
Role of Bihar Startup Fund Trust (BSFT)
The BSFT, established as a nodal agency by the Department of Industries, Government of Bihar, is leading the implementation of the Bihar Startup Policy. This policy is strategically designed to promote entrepreneurship and innovation by fostering a conducive ecosystem for startup growth in the state.
Under this policy framework, the Bihar government has allocated an initial Corpus of Rs 500 crore to the BSFT. From this allocation, the Bihar Startup Scale-up Financing Fund (BSSFF) has been created with an initial corpus of Rs 50 crore, dedicated to providing scale-up funding support to startups.
Fund of Funds Model
Managed by SIDBI, the BSSFF operates on a fund-of-funds model. This means that instead of directly investing in startup companies, it contributes to the corpus of SEBI-registered Alternative Investment Funds (AIFs), which subsequently invest in startups. This approach is aimed at amplifying funding support to startups, thereby facilitating their growth and development.
Role of SIDBI
Established in 1990, SIDBI has been instrumental in shaping the startup ecosystem in India, particularly during a time when risk capital and venture capital were scarce. Over the past three decades, SIDBI has introduced several pioneering initiatives to support startups, including various schemes and partnerships with the Government of India and state governments.
SIDBI is currently managing funds focused on Agro and Rural enterprises, as well as state-focused funds for Uttar Pradesh, Odisha, and now Bihar. This collaboration with the Bihar Startup Fund Trust underscores SIDBI’s commitment to fostering entrepreneurship and innovation across India.