In a bid to boost entrepreneurship in the state of Tamil Nadu, the government has announced that they will soon launch “Amma Venture Fund”. The fund will have a corpus of around $30 million and work along with the biotech incubation centre in Chennai.
Several sources reports that the state’s Ministry of Finance has already started the groundwork for the fund. With this initiative, a bunch of selected startups will get around $150,000 in equity funding. The fund was initially announced by Tamil Nadu’s former CM J Jayalalithaa.
Commenting about the type of investments, a source aware of the matter told ToI:
The fund will receive cash inflow from the central government. Funding could be a combination of equity and debt. About 25% of equity capital will be given in the form of subsidy. The other 75% capital requirement could be in the form of debt. This could be, loans at a concessional rate as announced in former Chief Minister J Jayalalithaa’s manifesto.
Since quite some time, the Tamil Nadu Government has been actively trying to promote entrepreneurial projects in the state. In September 2015, Tamil Nadu Government signed a Memorandum of Understanding (MoU) with Uber to create thousands of work and entrepreneurship opportunities, foster technical innovation and support development in the state. Earlier this year, in March, Nasscom also announced a partnership with Tamil Nadu Government to open its first warehouse in Chennai.
The venture fund may also get some cash inflow from the central government also under recently announced ‘Startup India, Stand up India’ initiative. Under the initiative, center is committed to helping states nurture their own startup culture.
