Why Startup India’s $1.5b fund-of-funds needs to succeed

Early last year, when the ongoing downturn in India’s start-up market was beginning to get serious, the central government decided to step in and fix what it saw as some key problems. One of those was the woefully small presence of a self-reliant, domestic venture capital industry. In January, as part of its ambitious Start-up India programme, it announced the Rs10,000 crore (roughly $1.5 billion) Fund-of-Funds for Start-ups (FFS) that would invest in local venture capital funds which would, in turn, back early stage start-ups. A little over 12 months later, FFS remains a bit of a non-starter.