3rd Call for Applications under “Fund of Funds – Ace” For Biotechnology Innovations


Relevent Country: India

Type of work: Research and Survey

The Biotechnology Industry Research Assistance Council (BIRAC) invites applications for the 3rd National call under Fund of Funds – AcE Fund from SEBI registered category I and II AIFs (Alternative Investment Funds).

Biotechnology including medical technologies industry (hereafter referred to as “Biotech”) 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.

The proposed initiative – BIRAC AcE (Accelerating Entrepreneurs) Fund (hereafter referred to as “AcE Fund”), operate as “Fund of Funds” which will foster R&D and innovation in Biotechnology domains (including areas such as healthcare, pharma, medical devices, agriculture, sanitation to name a few). AcE Fund shall invest in and partner with SEBI- r e g i s t e r ed AIF s (i. e . Venture Funds and Angel Funds), which will be professionally managed and desirous of investing in these sectors. It is intended that the AcE Fund plugs the gap of the “Valley of Death “encountered by the Biotech startups during their product development cycle and growth phase.

AcE Fund s h a l l 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 p r o p e r t y i n the country and encourage m o r e entrepreneurs to work towards product and technology development of high quality at affordable economies in sustainable manner. AcE Fund is being promoted by DBT through BIRAC, under the aegis of Make in India initiative.

BIRAC AcE Fund Committee & its Role

  • BIRAC will constitute a BIRAC AcE Apex Committee (“AcE Apex Committee”) that will include members having experience in investment, startups and entrepreneurship development etc. including representatives of DBT. This AcE Apex Committee shall consider the proposals of eligible partners for the implementation of the AcE Fund.
  • Role of the AcE Apex Fund Committee are as follows:
  • Scrutiny of proposals received from potential AcE partner and identification of AcE partner.
  • Quantum of commitment out of AcE Fund to Daughter Fund.
  • Evaluation of the progress made by AcE Partner(s).
  • Monitoring/ review of AcE Fund implementation.
  • Any other matter referred to by the BIRAC.

AcE Fund Implementation Tracery

  • On identification of Daughter Fund(s), BIRAC will sign a Contribution Agreement indicating agreed terms and conditions.
  • Capital Commitment of AcE Fund towards the Daughter Funds shall be drawndown in accordance with the Contribution Agreement.
  • The AcE fund partner through the daughter Fund shall further invest in portfolio companies and take commensurate securities of the startup. Further the equity stake of BIRAC in a start-up would be proportional to the equity dilution in response to funding by other stakeholders/partners.
  • The AcE Fund Partner shall give an half yearly report indicating the total number of portfolio companies approved for funding, fund commitment and funds released/to be released for the corresponding daughter fund(s).
  • AcE Fund governance including exit shall be in according with the partner specific contribution agreement & Investment management agreement.

Eligibility Criteria

  • SEBI registered category I and II Alternative Investment Funds. Following will be preferred.
  • Keen to invest in Healthcare, Life Sciences, Pharma, Biopharma, Med-tech, Diagnostics, Industrial- Biotech, Agri-tech, Bio-IT/Services and allied areas.
  • Support Startups and SMEs.
  • First close achieved.
  • Commitment from an Institutional investor.
  • Past experience of investment in biotech startups.

Selection of AcE Fund Partner

  • BIRAC will select Daughter Funds through Advertisement or other means for its AcE fund implementations.
  • The Potential AcE partner applicant should be a proper legal entity operationalizing eligible daughter fund(s) as described. The applicant should have experience given below : –
  • Over a period of preceding five years particularly in Biotechnology/Health- Science/Life – Science related field for three years.
  • The potential AcE fund applicant (which should be a SEBI-registered AIF at the time of application) shall submit a detailed proposal including the Fund Manager’s track record and experience in fund management or seed-investment (including details of work done and experience of the team in Biotech sectors), proposed Fund Size, tenure of the Fund, commitment  period, Fund’s investment strategy and commitment towards investments in Biotech sectors, management fee and carry structure, and commitment sought from BIRAC’s AcE Fund.
  • Preference shall be given to AcE Fund partner that have already received commitments or inprinciple approvals from other contributors in the Daughter Fund. However, in exceptional cases, AcE Fund may make the anchor commitment towards a Daughter Fund.
  • A copy of the private placement memorandum and contribution agreement shall accompany the detailed proposal. Along with details of the Fund Manager has been operating other funds in the past or the proposed Daughter Fund is already in existence.
  • Copies of the annual audited accounts and annual reports for preceding three years (depending on the date of establishment of the fund) should be submitted.
  • The AcE Fund partner shall be shortlisted by the BIRAC AcE Apex Committee as detailed later.

Source: https://www.birac.nic.in/desc_new.php?id=989