Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.
About the Policy:
With an initiative to spur entrepreneurship across India, 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.
Under SISFS, DPIIT grants funding up to INR 525 Lakh to selected Incubators for disbursement to the startups as Grant Fund and Debt Fund.
- The Scheme aims to provide financial assistance through incubators to startups for proof of concept, prototype development, product trials, market entry and commercialization.
- It assists the 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.
- Upto INR 50 Lakh of funding support in form of debt instruments.
- Grant upto INR 20 Lakh.
- A startup, recognized by DPIIT, should not be incorporated 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 INR 10 Lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidised 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.
FAQs (Frequently Asked Questions):
- What is Startup India Seed Fund Scheme?
Startup India Seed Fund Scheme (SISFS) provides financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. The Seed Fund will be disbursed to selected startups through eligible incubators across India. Eligible startups can apply for the scheme on the Startup India portal.
- Who can apply to SISFS?
A startup recognized by DPIIT, incorporated not more than 2 years ago at the time of application, is invited to apply for the scheme. Detailed eligibility criteria can be found at https://seedfund.startupindia.gov.in/about.
- How much seed funding can a startup receive under the scheme?
Seed Fund to an eligible startup by the incubator shall be disbursed as follows:
- Up to Rs. 20 Lakhs as a grant for validation of Proof of Concept, prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to developing prototypes, product testing, building a product ready for market launch, etc.
- Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.
- A startup applicant can avail of seed support in the form of grants and debt/convertible debentures each once per the scheme’s guidelines
- Can I apply for the scheme as an individual entrepreneur, or do I need a team?
No, individual entrepreneurs are not eligible to apply for support under the scheme. Only DPIIT recognized startups could apply for the SISFS. To get DPIIT-recognized, please visit:
- Does the scheme support startups from specific sectors?
SISFS is a sector agnostic scheme, which means that startups from any sector can apply for the scheme. However, 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. This list of sectors is indicative and not exhaustive.
- Are there any minimum education qualification criteria for founders to apply for SISFS?
There is no minimum education qualification required for founders to apply for SISFS
- Are there any exemptions to any of the eligibility criteria?
No, there are no exemptions to any of the eligibility criteria. All the criteria must be met on the date of application submission.
FOR MORE DETAILS VISIT: Startup India Seed Fund Scheme