The National Innovation Council (NInC) and the Ministry of MSME today jointly announced the creation of the India Inclusive Innovation Fund (IIIF) in New Delhi.
The National Innovation Council (NInC) and the Ministry of MSME today jointly announced the creation of the India Inclusive Innovation Fund (IIIF) in New Delhi. IIIF, which has been approved by the Union Cabinet, was conceived and architected by the NInC as a unique concept which seeks to combine innovation and the dynamism of enterprise to solve the problems of citizens at the base of the economic pyramid in India.
Speaking about the Fund, Sam Pitroda, Chaiman of NInC and Advisor to the Prime Minister on Public Information, Infrastructure and Innovation said, “The needs of the people at the base of the economic pyramid are today served by philanthropy and government grants/subsidies which can never be either adequate or scalable. IIIF seeks to leverage the model of Venture Capital to transform the lives of the less privileged.”
The IIF seeks to create a new class of capital which helps set up and scale entrepreneurial skills and innovation which address the needs of the base of the economic pyramid. The Fund will invest in innovative ventures that are scalable, sustainable and therefore profitable but address social needs of the less privileged citizens in areas such as healthcare, food, nutrition, agriculture, education/skill development, energy, financial inclusion, water, sanitation, employment generation, etc.
The Fund will be registered under SEBI’s Alternative Investment Fund Category I guidelines with an initial corpus of Rs 500 crore, with the Ministry of MSME committing to 20% (Rs 100 crore) and the balance being given by banks, insurance companies, overseas financial and development institutions. The Fund’s eventual aim is to expand the corpus to Rs 5000 crore over the next 24 months.
“We aim to operationalise the Fund in the coming two months and have received 80 proposals so far. According to me, if we fund even 100 start-ups initially then that will be a good start. We will try to achieve this by connecting to all groups of entrepreneurial ventures,” Pitroda said.
Lack of adequate capital is one of the reasons why ventures and entrepreneurs have failed to take off. IIIF seeks to address this gap and therefore at least 50% of its investments initially will be for enterprises that fall in MSME stage.
IIIF will also partner with the entire ecosystem in this space, including incubators, angel groups and public R&D programmes to support the commercialisation and deployment of socially relevant innovative technologies and solutions.