India launches Startup India Seed Fund Scheme of US$ 126M

India’s Minister of Railways, Commerce and Industry, Consumer Affairs and Food and Public Distribution, Piyush Goyal, launched an INR 945 crores (US$ 126M) Startup India Seed Fund Scheme (SISFS) on Monday. The scheme was announced by the Prime Minister of India – Shri Narendra Modi on January 16, 2021, to mark the fifth year anniversary of the Startup India initiative.

As per the scheme, US$ 126M will be allocated over the next four years for providing seed funding to startups through eligible incubators across India. It is expected that the scheme will support around 3,600 startups through 300 incubators.

Under SISFS, startups will be provided financial assistance on the basis of their proof of concept, prototype development, product trials, market entry and commercialisation.

According to Minister Piyush Goyal, the scheme will secure seed funding, inspire innovation, support ideas, facilitate implementation, and kick start a startup revolution. There will be a focus on channelling adequate funding to the tier 2 and tier 3 towns of India, creating a robust startup ecosystem. Innovators from rural areas can also come forward and benefit from the scheme.

Startups from the following sectors will be given preference – Social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.

Piyush Goyal said, “Our goal is to help protect Indian startups and ideas from being bought out by foreign or savvy investors for cheap. Under the guidance of Prime Minister Modi, the Department for Promotion of Industry and Internal Trade (DPIIT) has worked tirelessly to bring a tectonic shift in the start-up ecosystem in India.”

The government will provide grants of up to INR 5 Crores to eligible incubators in three or more tranches and the quantum of the first instalment may be up to 40% of the approved commitment. A component of the management fee of 5% of the seed fund grant will be provisioned to the incubator.

An online portal has been created by DPIIT which will allow incubators to apply for funds under it. An Experts Advisory Committee (EAC) has been created by DPIIT to execute and monitor the Startup India Seed Fund Scheme. The selected startups will receive grants of up to INR 20 lakhs. Moreover, investments of up to INR 50 lakh can be provided to the startups for market entry, commercialisation or scaling up through convertible debentures or debt-linked instruments.

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

We try our best to fact check and bring the best, well-researched and non-plagiarized content to you. Please let us know

-if there are any discrepancies in any of our published stories,

-how we can improve,

-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback and thank you for stopping by!

Next Story