Local venture funds boost Gujarat's startups

In a decade, Gujarat has successfully turned itself into a strong ecosystem for startups.

Locally created venture funds have been increasingly responsible for driving the growth of Gujarat's startups, which clock enviable valuations after being funded.

The need for capital is crucial for startups not just at an early stage, but at the growth-and-acceleration stage as well.

A case in point is Kettle Borough Venture Capital based in Ahmedabad which registered last year.

"The startup ecosystem in Gujarat is maturing and it is only wise to fund local entrepreneurs. We have already made investments worth Rs 3 crore since our inception last year. By June 2022, we aim to invest Rs 10 crore in startups," said Nisarg Shah, managing partner of the fund, who has invested 15% of the capital whereas 85% of the capital has been externally raised.

Similarly, Ahmedabad based accelerator, DevX – which is a sector-agnostic fund has invested Rs 15 crore in some 15 startups thus far in the SAAS, fintech, and direct-to-consumer brand sectors.

Another city-based seed-stage venture fund, Amara Ventures, has also invested in more than 15 startups in about a year.

With Gujarat International Finance Tec-City (GIFT City) supporting alternative investment funds, at least 20 AIFs have registered with IFSC authority, at the country's first International Financial Services Centre (IFSC) in Gandhinagar.

Sources had reported that the AIFs are looking to manage funds to the tune of Rs 40,000 crore at GIFT City, whereas 30 other proposals for AIFs are awaiting clearance.

Besides registered VC funds, several successful businessmen and entrepreneurs have also funded startups by enrolling in one or the other angel networks