A person familiar with the development told the Mint that Poonawala has submitted an application to the Securities and Exchange Board of India (SEBI) to register the fund as a Category II Alternative Investment Fund (AIF). At first, he will be the sole investor, and then the fund will seek investment from other outside investors.
Adar Poonawalla and the Poonawalla family office have previously invested in a number of companies, including Wellness Forever, Mylab, U GRO Capital, Swasti Microfinance and Wakau Interactive.
“As very high net worth individuals, they cannot invest in IPO-related companies and have other restrictions when investing in unlisted companies and will later launch a Cat-II fund,” the person added.
The fund is expected to be sector agnostic and show interest in startups operating in areas such as green energy, retail, pharmaceuticals, healthcare and wellness.
The Indian startup ecosystem is currently experiencing a funding crisis. Companies struggle to raise capital at the proper valuation. A PTI report indicated that venture capital funding fell 42 percent in November compared to a year earlier.
Coupled with the global economic downturn and a "supposed" funding winter, tech companies have been seen laying off employees to keep the business on the path to profitability. For example, Byju's has announced plans to ration 5 percent of its 50,000-person workforce. Other technical players, including Vedantu and Unacademy, also ended up on staff.
Now we will see if the fund led by Poonawalla can make changes in this last scenario.
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