Commerce Ministry notifies Rs 945 crore seed fund for startups

3AI February 2, 2021

DPIIT said that preference would be given to startups offering solutions in sectors including social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.

The government has approved the Rs 945-crore Startup India Seed Fund Scheme (SISFS) for the period 2021-25 to offer early-stage funding to startups for “proof of concept, prototype development, product trials, market entry and commercialization,” implementing body Department for Promotion of Industry and Internal Trade (DPIIT) said in its notification. Startups across sectors registered with the DPIIT and incorporated not more than two years ago at the time of applying for the scheme will be eligible for securing capital. The funding will be disbursed through selected incubators assisted by the central government or state governments.

“We are on course to implement the scheme wef 1 April ‘21,” DPIIT Joint Secretary Anil Agrawal tweeted on Friday. Prime Minister Narendra Modi had earlier this month announced the seed fund at the Startup India’s international summit Prarambh. In his address, PM Modi had said that the government is taking steps to ensure that there is no shortage of capital for startups and that the government will also help startups to raise debt capital ahead by providing the guarantee.

Apart from the two-year incorporation window, DPIIT said that preference would be given to startups offering solutions in sectors including social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc. Also, eligible startups should not have received over Rs 10 lakh of monetary support under any other Central or State Government scheme and that founders should have at least 51 per cent stake at the time of application to the incubator for the scheme.

The selected incubators will disburse up to Rs 20 lakhs as grant to startups for their validation of proof of concept, or prototype development, or product trials. This grant will be disbursed in milestone-based installments that can be related to the development of prototype, product testing, building a product ready for market launch, etc. Further, up to Rs 50 lakhs will be offered to startups for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.

The government also announced eligibility criteria for incubators assisted by the central government or state governments to participate in the scheme that included at least two years of operability on the date of applying for the scheme, capacity to seat at least 25 individuals, at least five startups undergoing incubation at the time of application of the scheme. The scheme will be executed and monitored by an Experts Advisory Committee (EAC) to be set-up by DPIIT. EAC will evaluate incubators to provide grants of up to Rs 5 crore in milestone-based three or more installments.

Picture from freepik.com

Generating powerful learning experiences!

Featured Article: Author: Amita Mirajkar, EXL As technology permeates every aspect of our lives, the education sector stands on the verge of a transformative change, courtesy Generative AI. Last few months, we have seen a surge of concern across institutions of higher learning as Generative AI programs, such as ChatGPT, gain popularity. According to MarketResearch, Generative […]

A peek into how AI will dominate functioning of Next Gen GBS

Author: Saswata Kar, Head – Analytics & Data Sciences, Philips GBS | LinkedIn – https://www.linkedin.com/in/saswata-kar-95b9074/ Global Business Services or GBS is the collective name given to centralized hubs where big corporations have moved processes that can benefit from centralization, standardization, and automation. The location for these centers is largely governed by cost considerations and talent […]

IIT Delhi Offers Free Online Course on AI

IIT Delhi is offering a free online 12-week programme on Artificial Intelligence with a certificate on completion. Indian Institute of Technology (IIT) Delhi is inviting registrations from those who would like to enrol for a 12-week long free online course on Artificial Intelligence. This programme will be offered on the National Programme on Technology Enhanced […]

Embedding Data Quality in Data Strategy & Design for AI

Featured Article: Author: Prabhu Chandrasekaran AI has been there over a decade, and with Gen AI touching newer frontiers and pushing the envelope across boundaries irrespective of industries and part of the society, One thing that is clearly emerging world is not the same and – “Data” is not mere oil but a “Strategic Asset”. […]

India's largest platform and marketplace for GCCs, AI & Analytics leaders & professionals

3AI Digital Library