What is the Start-up India Seed Fund Scheme that offers upto ₹50 lakh to founders? Details here

Over four years ago, Department for Promotion of Industry and Internal Trade (DPIIT) had launched Start-up India Seed Fund Scheme (SISFS) in April 2021 with a total budget of ₹945 crore meant for those startups which are undergoing the stages of proof of concept, prototype development, product trials, market-entry, and commercialisation.

The eligible startups can apply for the scheme on the Startup India portal. The Seed Fund will be disbursed to selected startups through eligible incubators across India.

Grants of upto ₹50 lakh

These are the following benefits of this scheme:

I. ₹20 lakh grant: Under the scheme, one can be awarded up to ₹20 Lakhs as a grant for validation of proof of concept, prototype development, or product trials. The grant will be disbursed in milestone-based installments.

These milestones can be related to the development of prototypes, product testing, building a product ready for market launch.

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II.  ₹50 lakh grant: When the start up wants funding for market entry, or for commercialisation, or for scaling up through convertible debentures or debt or debt-linked instruments, then one can be granted a funding of up to ₹50 lakhs of investment.

III. Meanwhile, it is vital to note that seed funds can not be used for the creation of any facilities but for the purpose it has been granted for.

Eligibility

These are some of the eligibility criteria under the Startup India Seed Fund Scheme:

I. Recognised: A startup, which is recognised by DPIIT, should have been incorporated not more than two years ago at the time of application.

II. Viable for commercialisation: There must be a business idea for developing a product or a service with market fit, which is viable for commercialisation, and scope of scaling.

III. Problem being solved: A 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.

IV. Sectors: This scheme primarily gives preference to those startups which are creating some innovative solutions in the sectors including social impact, waste management, food processing, water management, biotechnology, financial inclusion, education, healthcare, energy , agriculture, defense, space, mobility, railways, oil and gas and textiles.

V. Already received: Additionally, the startup should not have got more than ₹10 lakhs of monetary support under any other Central or State Government scheme but this does not include prize money from competitions and grand challenges, subsidised working space, founder monthly allowance or access to labs.

VI. Promoters: Shareholding of Indian promoters in the startup should be over 51 percent at the time of application.

The seed support can be availed in any form – grants and debt/convertible debentures as per the guidelines of the scheme.

Application process

This is the process start-ups need to follow.

A: On the Startup India portal, online call for applications is typically hosted on an ongoing basis.

B: As mentioned above, applicants must be a DPIIT-recognised startup. Those which fit the bill can apply through the official Startup India Portal (https://seedfund.startupindia.gov.in).

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C: On the home page, one can proceed with ‘Apply Now’ for startups.

D: It is recommended to login using the credentials used during the startup recognition process to apply for the scheme and submit the application form.

E: There is an option to apply for seed funds to any three incubators selected as disbursing partners for this scheme in order of their preference.

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