Startup India: Rs. 945-cr Seed Fund to support 3,600 entrepreneurs by Govt.

Looking forward to achieve its target corpus of Rs 945 crore to be disbursed within five years in early-stage startups, the Startup India Seed Fund is about to support around 3,600 entrepreneurs through 300 incubators, according to its implementing section Department for Promotion of Industry and Internal Trade (DPIIT).

The investment will be made in eligible startups in order to support their proof of concept, prototype development, product trials, market-entry, and commercialization. Last week, the scheme had been notifies by the Commerce Ministry few days after that PM Modi had announced the fund at the Startup India’s international summit Prarambh. The scheme is expected to be carried out on April 1, 2021.

"These 3,600 entrepreneurs will represent DPIIT-registered startups from all sectors and incorporated for maximum two years while applying for the scheme. The selected startups will be offered up Rs. 20 lakhs as a grant for proof of concept and up to Rs 50 lakhs through convertible debentures or debt or debt-linked instruments for commercialization of the product," had said DPIIT on Monday on Twitter. Based on this scheme, the Startups from sectors like social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc. would be preferably selected.

A while after Piyush Goyal, Commerce Minister, had urged the founded Indian businesses and entrepreneurs to devote a particular figure of their possession for “maybe an initial Rs 10,000-crore fund” for early-stage investing in startups, the development is noticed. The fund is likely to support startups in the above mentioned sectors that haven’t received as much exposure to venture funding as other sectors have, such as e-commerce, foodtech, travel, education, etc. As per the data from Tracxn, edtech followed by food delivery, digital wallets, gaming, e-commerce logistics were among the top categories attracting majority funding in 2020. Startups missing the early-stage capital infusion from select investors explore foreign investments from venture funds, corporates.

Those incubators who are assisted by the Central government or state governments will be eligible to be onboarded to the Seed Fund scheme. Also minimum two years of operability is of the eligibility criteria on the date of applying for the scheme, as well as capacity to seat at least 25 individuals, at least five startups undergoing incubation at the time of application of the scheme, etc.