Tamil Nadu's Fund of Funds Scheme Nears Launch, Aims to Boost Startup Ecosystem
The Tamil Nadu government is in the final stages of launching its fund of funds scheme. Operations are expected to begin next month. The administration has completed discussions with stakeholders and structured a program to attract risk capital and private investment. This initiative aims to bridge gaps in the local venture capital ecosystem.
Co-Investment Model and Implementation Details
Government officials, speaking on condition of anonymity, revealed that the program will adopt a co-investment model. The government will issue a government order on the matter shortly. Following this, expressions of interest will be invited from eligible venture capital funds.
These funds will be onboarded through a structured due diligence process. A professional committee will evaluate the VC firms and investments based on their experience and track record. The program is also expected to receive a specific allocation in the upcoming state budget.
Focus on Tamil Nadu Startups and Priority Areas
The funding will target Tamil Nadu-based startups or startups with a significant presence in the state. The government is likely to prioritize TN-based venture funding firms. While check sizes are yet to be finalized, the program will back startups working in areas identified by the government as priority areas. This includes deep-tech startups.
Chief Minister M K Stalin announced the fund last October with an initial outlay of 100 crore. The move is significant as the state looks to aggressively promote deep-tech startups under a new dedicated policy.
Broader Efforts to Support Startups
StartupTN, the state's startup promotion body, is working to bridge funding gaps through a mix of existing and proposed schemes. Several funds are slated for operation this year, including a 10 crore space tech fund. This comprehensive approach underscores Tamil Nadu's commitment to fostering innovation and economic growth through strategic investments in its startup community.
