Aiming to foster R&D and innovation in biotechnology domains including areas such as healthcare, pharma, medical devices, etc, the Biotechnology Industry Research Assistance Council (BIRAC) has launched the Accelerating Entrepreneurs Fund (AcE Fund) which is a new equity 'Fund of Funds' exclusively for biotech start-ups which aims to partner with SEBI-registered private funds to invest equity in start-ups for providing the risk capital to undertake innovation, research and product development.
It is intended that the AcE Fund will plug the gap of the 'Valley of Death' encountered by the biotech start-ups during their product development cycle and growth phase.
The launch of such a fund by BIRAC is significant as biotechnology including medical technologies industry has the power to provide solutions to myriad challenges that we face in healthcare, food & nutrition, agriculture, renewable energy and environment remediation. It is also known that biotech product development is associated with significant risks especially it requires significant amount of capital as well as a long gestation period sometime up to 10-12 years.
Over the last 5 years, BIRAC through a dedicated and focused approach has created a significant and substantial change in the biotech entrepreneurial ecosystem of the country by designing and operationalizing early stage funding programmes such as Biotechnology Ignition Grant (BIG), which has evolved to be the largest early stage funding program for biotech entrepreneurs and start-ups in the country. Through BIG and other funding programmes such as SPARSH, BIRAC has funded close to 500 biotech start-ups who are focused on developing next generation solutions through cutting edge product development.
It is now crucial that many of these start-ups are able to transition to the next level and grow. This next phase of growth requires growth capital and this is a critical gap where the BIRAC AcE Fund intends to fill through a systematic intervention to attract more capital venture.
AcE Fund shall enable creation of an ecosystem for providing risk capital to young enterprises to undertake research and development in high priority technology areas. It will, in the process, enrich the intellectual property in the country and encourage more entrepreneurs to work towards product and technology development of high quality at affordable economies in sustainable manner. AcE Fund is being promoted by the Department of Biotechnology (DBT) through BIRAC, under the aegis of Make in India initiative.
AcE Fund shall act as a catalyst to attract private investors, corporates and LPs to such Daughter Funds. The Daughter Fund shall commit to invest a portion of their corpus in biotech startups with growth potential. The Daughter Funds supported by the AcE Fund will support startups at an early and growth stage that may be ready to receive pre-Series-A or Series-A funding – with a minimum commitment towards startups in the biotech space. The Fund shall make a maximum capital commitment of up to Rs. 30 crore or up to 30 per cent of the total aggregate capital commitment amount (i.e. fund corpus) in the each daughter Fund. The assistance to each of the start-up will be up to Rs. 7 crore against equity held by the Partner.