Exciting news for India’s startup ecosystem! For the first time, the central government is set to allocate a dedicated corpus to the Small Industries Development Bank of India (Sidbi) to oversee a fund of funds focused on secondary transactions. What does this mean? Sidbi will now sponsor venture capital investors engaged in secondary deals—offering a strategic pathway for investors to exit their investments and return capital to their sponsors. This initiative comes as India’s startup ecosystem matures and the need for structured exits grows. Why is this important? Globally, secondary funds have played a pivotal role in ensuring timely exits for early investors. As seen in markets like the US and China, these funds prevent short-term decision-making and offer sustainable growth opportunities. India has already witnessed significant exits, with over $5 billion raised through secondary transactions and IPOs in 2024 alone.
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