Govt. of India to launch ‘Startup India Seed Fund’ with a Rs. 1,000-crore corpus

In order to help start-ups get seed money for starting their ventures and help them grow, the government of India has decided to launch a ‘Startup India Seed Fund’ with a Rs. 1,000-crore corpus. In the future too, the government will also help start-ups raise debt capital through guarantees. This was said by PM Modi while speaking at the ‘Prarambh: Start-up India International Summit’ recently.

The two-day summit, marking the fifth anniversary of the Start-up India initiative, brought together innovators, entrepreneurs, investors, regulators, industry leaders, and academicians from India and across the world including BIMSTEC countries.

“To ensure that our start-ups don’t fall short of funds, our country has taken a lot of steps. In this series, I want to make another important announcement today at this event. To help start-ups get initial funding, the country will launch a ₹1,000-crore Start-up India Seed Fund. This fund will help in setting up new start-ups and aid them in growth,” Modi said.

Through the ‘fund of funds’ scheme, start-ups are already being helped by the government to raise equity capital. In future, the government, through guarantees, will help start-ups to raise debt capital, he added.

The Department for Promotion of Industry and Internal Trade (DPIIT) has taken up the matter of implementation of both the proposed Start-up India Seed Fund Scheme and the Credit Guarantee Scheme for Start-ups (with corpus of Rs. 2,000 crore) with the Finance Ministry in the forthcoming Budget.

Start-ups are eager for the announcement of both funds as overall venture capital funding dropped 30 per cent, from $14 billion in 2019 to $10 billion in 2020, as per industry estimates.

During the pandemic, when big companies were struggling to survive around the world, in India a new army of start-ups was being formed to cater to diverse needs. The start-ups looked for opportunity in adversity and at the time of calamity brought in faith, Modi said, adding that the success story of start ups is not limited to cities.