👍IBA reaching out to start-ups for funding needs, says DPIIT official

Clipped from: https://www.business-standard.com/finance/news/iba-reaching-out-to-start-ups-for-financial-needs-says-dpiit-official-123041100814_1.html

Only DPIIT-registered start-ups are eligible for funding under various support schemes of the industry department

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Following the collapse of Silicon Valley Bank (SVB) last month, the Indian Banking Association (IBA) has started conducting outreach programmes for start-ups in a bid to ensure that their financial requirements are met.

“This was never done so intensively before. Reaching out to IBA is primarily because of newspaper articles that state that the start-up ecosystem is getting hit because of the SVB crisis. It was done to reassure that the Indian banking ecosystem is entrenched with the system,” said Department for Promotion of Industry and Internal Trade (DPIIT) joint secretary Manmeet Nanda.

She added that IBA has already started conducting intensive workshops across different states and Union Territories (UTs). The official further said that contrary to what is being said by global agencies, India is not witnessing a fall in start-up funding.

“We have not seen a plunge that way. We have two systems in place for funding start-ups — Startup India Seed Fund and Fund of Funds (FoF). We have launched a credit guarantee scheme. We have interacted with the IBA…and they are reaching out to start-ups, asking them their financial needs,” Nanda told reporters on Tuesday.

According to global market intelligence platform Tracxn, in Q1 of 2023, Indian start-ups have raised $2.8 billion to date. This is 75 per cent lower compared to the same period in the previous year. This is mainly due to global headwinds such as rising inflation and interest rates, impacting investments significantly.

Only DPIIT-registered start-ups are eligible for funding under various support schemes of the industry department.

Such start-ups’ annual turnover cannot exceed Rs 100 crore for any financial year since incorporation. Also, the period of operation cannot be more than 10 years since the date of incorporation.

The Tracxn report, however, includes bigger and a lot more start-ups with more than Rs 100-crore turnover.

According to Nanda, there are around 95,000 government-recognised start-ups. There has been a 40 per cent growth in the number of DPIIT-registered start-ups over the last one year. During the year, more than 29,000 start-ups have been recognised. There is no estimate of the total number of start-ups in the country, though.

She said that FoF and credit guarantee schemes are doing well.

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