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

Towards a Responsible Future – Decoding the Importance of Ethics in AI

Featured Article by Anusha Thakur The conjunction of the obtainability of vast amounts of stretch, speed, and big data for the development of machine learning algorithms and cloud computing platforms has led to a varied range of innovations in Artificial Intelligence (AI). In an era defined by state-of-the-art technologies, the role of AI systems, and […]

Crossing the AI Adoption Chasm

Featured Article: Author: Abhishek Tandon, Director, Customer Success for Fosfor, LTIMindtree Chapter 1: The chasm between AI outcomes and business value The message is loud and clear. AI projects are not seeing the level of adoption and ROI that was expected of them over the last decade. But there is no doubt that AI Rules. […]

Digiboxx plans to hire 5,000 engineers

Digiboxx is also aiming to have 10 million users in the next three years Digiboxx has started offering up to 20 gigabyte (GB) of free online storage in which an user can store and share file size of up to 2 GB New Delhi: Online file storage and sharing services startup Digiboxx on Tuesday said […]

What CIOs can learn from the first 30 days of an AI Copilot

Featured Article Author: Koyelia Ghosh Roy, EXL Copilot is a buzzword now with almost all assistive solutions being tagged with them. However, it is the most in-demand solution in today’s era, helping from simple automation of mundane tasks like O365 CoPilot or very sophisticated, customized solutions for specialized tasks like data analysis using database agents […]

India's largest platform and marketplace for GCC & AI leaders and professionals

3AI Digital Library