Startup India Seed Fund Scheme (SISFS)

Why in News?

Recently, Minister of Railways, Commerce & Industry, Consumer Affairs and Food & Public Distribution launched the Startup India Seed Fund Scheme (SISFS). 

Launched On: 19^th April, 2021

Time Period: For the period of next 4 Years starting from 2021-22.

Aim: 

To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. 

NEED:

• Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise.
• Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants.
• It is essential to provide seed funding to startups with an innovative idea to conduct proof of concept trials.

Objectives:

• Startup India Seed Fund Scheme (SISFS) aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
• This would enable these startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions.

Features:

• It will be implemented with effect from 1^st April 2021 and Rs. 945 crores corpus will be divided over the next 4 Years (2021-25) for providing seed funding to eligible incubators across India.
• The scheme is sector-agnostic & will support startups across all sectors.
• It will be implemented by the Department for Promotion of Industry & Internal Trade, Ministry of Commerce & Industry.

How Startup India Seed Fund Will Operate?

The Seed Fund will be disbursed to eligible startups through eligible incubators across India by DPIIT (Department for Promotion of Industry and Internal Trade). It is Nodal Department of Seed Fund.

Eligibility Criteria:

💠 A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.

To get DPIIT-recognized, please visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html

💠 The startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling.

💠 The startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted.

💠 Preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.

💠 Startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility.

💠 Shareholding by Indian promoters in the startup should be at least 51% at the time of application to the incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

💠 A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.

Apply Now

Source: PIB