Snapdeal Founder Urges Government to Ramp Up Financial Backing for Startups Amidst Economic Growth

Calls for increased government support for Indian startups have emerged amidst concerns about a funding slowdown in the ecosystem. Here's a breakdown of the key points raised by industry leaders:

Need for Increased Capital:

• Kunal Bahl, co-founder of Titan Capital and founder of Snapdeal, highlighted the importance of creating a domestic pool of capital for new-age businesses.
• He lauded the government's Fund of Funds for Startups (FFS) scheme but emphasized its limitations due to a smaller corpus.
• Bahl suggests a significant increase in annual funding for FFS, potentially to Rs 5,000-10,000 crore, to fuel the ecosystem's growth.

Focus on Domestic Investments:

• Infosys co-founder S. Kris Gopalakrishnan emphasized the need for increased investment from domestic sources like family offices and fund managers.
• He expressed concern about the high percentage of ownership (80-90% beyond Series C) held by foreign funds in successful Indian startups.
• Gopalakrishnan suggests a target allocation of at least 15% of investments from domestic sources towards the startup ecosystem.

Government Initiatives:

• The government is reportedly considering measures to encourage local participation in startup funding.
• These measures include a framework to reduce investment risks for pension funds and insurers, and potential expansion of existing support schemes like FFS and Startup India seed funding.