Startup India Seed Fund Scheme Nurture Over 1400 Startups

Som Parkash, Minister of State (MoS) for Commerce and Industry, briefed the Parliament that 656 firms were fostered over the course of the previous two years by the Startup India Seed Fund Scheme (SISFS).

As many as 126 incubators were used to support the entrepreneurs as part of the Center’s flagship programme. In the fiscal year 2021–2022 (FY22), the SISFS onboarded as many as 304 businesses, and in FY23, it provided support to an additional 352 firms (till November 2022).

Karnataka, which had the most fostered startups (126), was closely followed by Maharashtra (104), Tamil Nadu (51), Gujarat (49) and Telangana (46).

The minister added that 773 firms have received funding through the Fund of Funds for Startups (FFS) programme to date. Giving a breakdown of the data, he stated that 86 additional firms were mentored in FY21 whereas 120 startups were incubated under the FFS plan in FY20.

As part of the funds of funds programme, 156 startups were accepted in FY22, and an additional 191 businesses were incubated in FY23 until November 2022.

Karnataka, which incubated 235 businesses, was the biggest recipient of the FFS programme, followed by Maharashtra (173) and Delhi (136).

In a written response, Parkash further informed the Parliament that 84,012 startups from various sectors are currently recognised by the DPIIT in India.

The bigger Startup India project aims to streamline capital requirements for entrepreneurs at all phases of their business cycle. It includes the SISFS and FFS schemes as well as the loan guarantee scheme.

In April 2021, the Startup India Seed Fund Scheme was launched with an investment of INR 945 Cr over a four-year period. The programme intends to offer money to companies at various phases of development, such as proof of concept, prototype development, product trials, market entry, and commercialization.

A total of 126 incubators have received approval for INR 455.25 Cr, which is then designated for the corresponding startup applications.

To give indigenous companies access to local funding, the Fund of Funds was launched in 2016 with a corpus fund of INR 10,000 crore. Under the plan, the fund makes investments in Alternative Investment Funds (AIFs) registered with SEBI, which make investments in start-up companies.

Through the Fund of Funds, the government asserts to have committed more than INR 7,528 Cr to 93 AIFs. AIFs have since made investments in 773 companies.

In order to scale the ecosystem, the Startup India programme has taken a multifaceted strategy. The administration recently notified the Parliament that 69 Atal Innovation Centers (AICs) and 10,000 Atal Tinkering Labs (ATLs) have been operationalized to date.

Over 2,900 enterprises have been nurtured through these AICs, and more than 15,000 employment have been produced. At AICs all around the country, more than 480 intellectual properties have also been created, and 800 training programmes have been held.

But for the past few months, a financing cold has gripped the Indian startup sector. A similar negative trend persisted in November 2022, when financing raised by Indian businesses fell 73% year over year to $1.1 Billion.