What is the Rs. 945 Crore Startup India Seed Fund Scheme?

The government’s Rs. 945 crore Startup India Seed Fund to help start-up entrepreneurs and incubators is finally here. This is all you need to know about it.

The Startup India Seed Fund Scheme (SISFS) aims to provide Rs. 945 crore over five years to help 3,600 entrepreneurs through 300 incubators. The guideline is exhibited under the auspices of the financial department, the Department for Promotion of Industry and Internal Trade (DPIIT).

The DPIIT will invest in qualified start-ups to support concepts, prototype development, product testing, market penetration and marketing guides. The plan was given the nod on 19 April 2021 and will be considered in effect from 1 April 2021.

Objectives of Startup India Seed Fund Scheme 

The scheme’s funding plan aims to build a robust start-up ecosystem, especially in non-urban areas in India. Start-ups selected under the scheme would preferably be from sectors including social influence, waste management, water control, economic inclusion, education, agriculture, food processing, biotechnology, healthcare, power, mobility, security, space, railways, oil and gas, textiles, etc.


The scheme will handhold and financially support early-stage start-ups across 300 incubation centres, almost three months after the Centre announced the plan.

Who will be the beneficiaries of the Startup India Seed Fund Scheme?

The fund will support start-ups in the sectors mentioned above that have not received venture capital funding like e-commerce, food technology, tourism, and education. Edtech, food distribution, digital wallet, fantasy games, e-commerce and logistics are the main categories that have attracted the most money in 2020.

SISFS will provide funding to promote innovation, advocate reform ideas, drive implementation and start an economic revolution. It will also create a robust start-up ecosystem, especially in areas outside the metropolitan areas where resources are often inadequate. The cross of the scheme is to encourage rural innovators for their development and profit.

What positive impact can the Startup India Seed Fund Scheme have on the business ecosystem?

The fund pledges to give up to Rs. 5 crores to specialised incubators selected by the SISFS panel of experts. This will give companies grants up to Rs. 20 lakh to validate their concept, develop the original models and test products.

Besides, the SISFS investment of Rs. 50 lakh will enable entrepreneurs to access markets, boost sales, and scale up through convertible securities or debt instruments. This will also play an equally significant role for young entrepreneurs affected by the catastrophic COVID-19 induced financial disaster in allowing them to succeed.

How can Start-ups and Incubators avail the benefits?

Parameters for Start-ups

Some of the many rules include- 

A start-up, recognised by DPIIT, incorporated not more than two years ago when applying.

The start-up must have a trade idea to develop a product or a service with a business fit, viable commercialisation, and scope of scaling.

The start-up should be using technology in its core product or service, business model, distribution model, or methodology to solve the targeted problem.

Parameters for Incubators

Some of the many rules include- 

The incubator must be a legitimate entity.

The incubator should be workable for at least two years on the date of request to the scheme.

The incubator must have the equipment to seat at least 25 individuals.

Interested entities need to sign up on the Startup India Seed Fund Scheme portal and register there.

In a nutshell, the Startup India Seed Fund Scheme is a promising way forward for new entrepreneurs as easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise, and the scheme promises only that. The fund will help those who fail to raise funds from venture capital firms and give them a competing chance in the business realm.

Aakash Sharma
Aakash Sharma
Aakash writes on Startup Ecosystem, Policies, Legal and Regulatory aspects of business planning. An alumnus of Delhi University, he is assistant editor at Dutch Uncles.



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