Electronics Development Fund (EDF)

Why in news?

With Rs. 257.77 crore invested, Electronics Development Fund supported 128 Indian startups nationwide.

• Launched in - 2016.
• Nodal Ministry - Ministry of Electronics and Information Technology (MeitY).
• Aim – To promote research, development, and entrepreneurship in the fields of electronics, nanoelectronics, and information technology.
• Objectives –
  • Promote innovation in electronics, nanoelectronics, and information technology.
  • Support startups and SMEs in the Electronics System Design and Manufacturing (ESDM) sector.
  • Enable indigenous design and development to reduce import dependence.
  • Facilitate acquisition of foreign technologies and companies to strengthen domestic capabilities.
• Operational Features –
  • Anchor Investor – Ministry of Electronics and Information Technology (MeitY), Government of India.
  • Trustee & Sponsor – Canara Bank (Public Sector Bank).
  • Investment Manager – Canbank Venture Capital Funds Ltd. (CVCFL), a 100% subsidiary of Canara Bank.

• Features –
• Fund of Funds model – EDF does not invest directly in startups but in professionally managed Daughter Funds, which provide risk capital to early-stage startups and companies developing new technologies.

Daughter Funds are SEBI registered professionally managed venture capital or angel funds that receive financial support from the EDF to invest in startups and innovation-driven enterprises in the electronics and IT sectors.

• Minority stake – EDF typically holds a minority share, encouraging private investment and professional fund management.
• Flexible corpus allocation – EDF’s share is based on market needs and the Investment Manager’s capacity.
• Autonomy for Investment Managers – Freedom to raise corpus, select investments, and monitor performance.
  • Final fund selection follows rigorous due diligence.
• Comprehensive coverage – EDF supports ventures across the entire electronics and IT value chain, ensuring strategic depth and sectoral inclusivity.

Reference

PIB | Electronics Development Fund