Saudi-India $2 billion fund to invest in startups

The Kingdom and India have set up a joint fund aimed at investing in innovation and the startup ecosystem, with a focus on strategic sectors. New Delhi recently proposed setting up a Saudi-India cooperation fund worth over $2 billion, similar to the UK-India Development Cooperation Fund.

Last month, India released a blueprint for the Saudi-India Development Cooperation Fund, starting with a $500 million fund. This will be a joint investment fund where each government will invest an agreed percentage.

The fund of funds will then invest an average of $20-25 million in sub-funds, which will in turn invest in 15-25 startups and growth companies, according to the Millennium Post.

However, the investment fund’s commitment to any sub-fund will be limited to one-third of the size of the latter to reduce commercial and concentration risks.

The sub-funds will be managed by reputable fund managers, while both the investment fund and the sub-funds will be regulated by the Securities and Exchange Board of India.

“Further investment guidelines could be developed after a round of consultations with internal stakeholders and market participants,” the proposals, which consider the investment fund and sub-funds the fastest option to set up within six months, say.