New Delhi, Mar 22 (KNN) Pension funds and insurance firms in India should look at the possibility of setting up a funding corpus like the ‘fund of funds’ to support startups working in new, emerging areas like deep tech, Amitabh Kant said on Tuesday.

Addressing an summit in New Delhi, Kant said, “The challenge is that Indian insurance companies and pension funds are still not investing in startups. There’s a vast amount of investable sums. They must be asked to put more and more resources into Indian startups.”

“Indian startups must start attracting Indian money, currently, much of the growth to late stage startups are heavily dependent on external funding to support and grow their businesses. Investors like Japan’s SoftBank, US-based Tiger Global are among the biggest backers of Indian startups,” Kant pointed out.

A slowdown in investor funding has pushed many startups to re-evaluate their business projections, halt new experimentations, triggering layoffs across the sector.

As per reports, at present, regulations do not specifically permit insurance companies and pension funds to invest directly in startups. There have been certain amendments in 2020-21 where insurance companies were permitted to invest in ‘fund of funds’, which could invest in startups, but not directly into startups.

Kant added that startups, which are particularly building green initiatives and operating in segments like deep tech, cloud, and robotics will gain traction.

“The focus should be to go green. Valuation and capital will flow into these startups,” he added.  (KNN Bureau)