Startup Village to benefit from Shariah compliant financing - IFN

Startup Village to benefit from Shariah compliant financing

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INDIA: India’s answer to Silicon Valley, the Startup Village in Kerala, will be receiving INR150 million (US$2.53 million) from Cheraman Financial Services’ Alternative Investment Fund. The fund, which received approval from the Securities and Exchange Board of India in April this year, targets Shariah compliant investments in the service and manufacturing sectors. The Startup Village is India’s first technology business incubator based on the model of public-private partnerships. The initiative is supported by the government of India, the Department of Science and Technology, Technopark Trivandrum and MobME Wireless. The Village, which was launched early last year, aims to incubate 1,000 product startups over the next 10 years and will focus primarily on student start-ups from college campuses. It aims to provide a platform for start-ups to create breakthrough technologies for the global telecommunications industry; and among the incentives afforded to new companies include a three-year tax exemption from the government, funding of up to INR10 million (US$168,782), as well as subsidized fees for tax consultations, infrastructure and IP services. Cheraman Financial Services, which is also known as Al Barakah Financial Services, was established under an equity participation with the Kerala State Industrial Development Corporation and private investors; majority of whom are from the Gulf. As at the 22nd April 2013, the fund is listed under Category II of the Securities and Exchange Board of India which includes private equity funds, debt funds and funds of funds. According to the regulator’s website, funds registered under this category are not allowed any specific incentives or concessions from the government or regulator. Cheraman Premium Fund I is the first scheme from the company which aims to carry out private equity investments totaling to INR250 million (US$4.21 million).