FICCI (Federation of Indian Chambers of Commerce and Industry) has donned VC hat by joining hands with civilian foreign aid agency of the US federal government, USAID. Together, they have floated a $15 million VC fund (Rs 78 crore approx) to support, sustain and scale up grand local ideas and innovations that can also be commercialised for India and other emerging markets [source].
Headquartered in N. Delhi, FICCI is one of the main organizations to fund and support many governmental and non-governmental educational institutes. It was founded by GD Birla and Purushottam Takkur in 1927, on the advice of Mahatma Gandhi.
The $15mn fund will be have Vijay Mahajan (BASIX CEO), Infinity Innovation Fund (IIF), managed by Saurabh Srivastava and DST (Department of Science and Technology) as the key stakeholders.
The contributions will be through a range of vehicles and financial assistance like grants, loans, technical collaborations and even equity investments in four key sectors: health, food security, climate change/energy and education. The alliance aims to raise $50 million (Rs 260 crore, approx) in the next 12 months from other corporate sponsors, foundations and government bodies.
Our take: It’s one thing to float a fund and another thing to execute. Most of the government aided funds end up as grants with no RoI (and very little value creation). We certainly believe that the time has come for industry bodies like FICCI to create investment vehicle to spur India growth (especially infrastructure segment) sans bureaucracy.