GVFL set to launch seed fund with a target of Rs 200 crore for technology enabled start-ups in Gujarat

The Gujarat Venture Finance Limited (GVFL) is set to launch a seed fund with a target of Rs 200 crore for technology enabled start-ups in Gujarat, the firm’s managing director Kamal Bansal announced on Tuesday.

“We are making a new fund called seed fund, with an investment of Rs 50 lakh to Rs 2 crore… this at a very nascent stage of a start-up. There is another set of funds wherein we will invest Rs 5 crore to Rs 15 crore, mainly for early stage and growth stage companies. This is to ensure that we are present at each and every stage. This will help in supporting the start-ups to the next level. This is the vision for the next 3-5 years,” Bansal, said.

A start-up matures in at least 10 years, but they need funds till second round, till such companies get bigger funds in the third round like private equity funds (Rs 10 crore — Rs 50 crore).

“Support is required till the company starts generating revenues, establishes its own customers and becomes known in the market, then we exit. So, we plan to support them for 5-7 years,” added Bansal.

The GVFL has invested Rs 50 crore in seven companies in 2022, all of which are in Gujarat at an early stage.

The firm is planning to invest about Rs 100 crore in 2023 in tech business to business software as a service (B2B saas) companies of health, gaming and sports, deep tech, etc., and selectively in the business to consumer companies. Seventy per cent of the total investment will be in Gujarat.

“For the seed funds, we will get a capital of Rs 100 crore from the government of Gujarat, and another Rs 100 crore we will raise from outside institutions,” said Bansal.