Source: Mint
Context:
A spacetech-focused venture capital fund set up by SIDBI Venture Capital Ltd. (SVCL), SIDBI’s subsidiary. Designed to invest in early-stage and growth-stage Indian spacetech companies across launch systems, satellites, payloads, earth observation, communications, and downstream applications.
Fund Details:
- First close: ₹1,005 crore
- Anchor investor: IN-SPACe, ₹1,000 crore
- Category: II Alternative Investment Fund (AIF)
- Tenure: 10 years
- Significance: Largest spacetech-focused VC fund in India; among the largest globally
Purpose & Objectives
- Strengthen India’s national space capabilities and competitiveness.
- Support early-stage and growth-stage spacetech companies.
- Enable faster commercialisation of Indian space innovations.
- Align with India’s goal of expanding its space economy to $44 billion by 2033.
What is an AIF?
- AIFs are privately pooled investment vehicles that collect money from investors and invest in assets other than traditional investments like stocks, bonds, and deposits.
- Regulated under the SEBI (Alternative Investment Funds) Regulations, 2012.
Who can invest?
- Mainly high-net-worth individuals (HNIs), institutional investors, and foreign investors.
- Minimum investment per investor: ₹1 crore (lower for employees/directors).
Categories of AIF
Category I AIF
- Invests in socially or economically desirable sectors.
- Examples:
- Venture Capital Funds
- Angel Funds
- SME Funds
- Social Venture Funds
- Infrastructure Funds
Category II AIF
- Do not get specific incentives from the government but are not allowed leverage except for day-to-day operations.
- Includes:
- Private Equity Funds
- Debt Funds
- Venture Capital Funds also operate here sometimes (as in Antariksh Fund)
Category III AIF
- Uses complex strategies: derivatives, leverage, long-short positions.
- Includes:
- Hedge Funds
- PIPE Funds (Private Investment in Public Equity)
Venture Capital Fund (VCF)
- A type of AIF (mainly under Category I, sometimes Category II)
- Pools capital to invest in early-stage, high-growth potential startups.
- Focuses on risky and innovative sectors like:
- Spacetech
- AI and Deeptech
- Biotechnology
- Fintech
- Clean energy
How VCFs Work
- High-risk, high-return investments.
- Fund managers take equity in startups.
- Returns depend on startup growth and exit (IPO, acquisition, buyback).
Key Characteristics of VCFs
- Support startups at seed, early-stage, Series A/B levels.
- Provide capital + mentorship + network access.
- Have long investment horizons (8–10 years typical).
