The government of India has revealed that as of April 30, 2023, over 1,000 startups have been selected by approved incubators to receive financial support under the Startup India Seed Fund Scheme (SISFS). The cumulative financial assistance provided to these startups amounts to INR 177 crore.
Substantial Financial Backing Approved by Expert Advisory Committee
According to Minister of State for Commerce and Industry, Som Parkash, the Expert Advisory Committee (EAC) has approved INR 611.36 crore for 160 incubators under the SISFS. These incubators have further selected 1,039 startups to receive a total of INR 176.63 crore in financial support.
Objectives and Scope of the Startup India Seed Fund Scheme
In 2021, the SISFS was established with a corpus of INR 945 crore. It operates for four years. The scheme aims to provide financial assistance to startups at different stages. These stages include proof of concept, prototype development, product trials, market entry, and commercialization.
Notable Incubators and Eligibility Criteria
The government has released a list of 160 incubators participating in the scheme. Vel Tech Technology Incubator stands out, as it approved INR 5 crore for 29 startups as of April 30, 2023. Crescent Innovation and Incubation Council, Foundation for Innovation & Research in Science & Technology, and Chitkara Innovation Incubator Foundation follow closely, with approved funds for 24 startups each.
Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) can receive funding through government-recognized incubators under the SISFS. To be eligible, startups must have at least 51% shareholding by Indian promoters.
Expansion of India’s Startup Ecosystem
The government launched the Startup India Seed Fund Scheme to strengthen the startup ecosystem. As of April 30, 2023, India has 98,119 recognized startups, a substantial rise from 428 in 2016.
Despite the supportive measures, the ongoing funding winter has led to a decline in seed funding for startups. Data indicates that seed stage startups raised only $479 million across 233 deals during the first half of 2023, marking a 53% drop from $1.02 billion in the second half of 2022.
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