The Startup India Seed Fund Scheme was launched by Commerce and Industry Minister Piyush Goyal on April 19, 2021. The Fund aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. An amount of 945 crore rupees corpus will be divided over the next 4 years for providing seed funding to eligible startups through eligible incubators across India. The scheme is expected to support an estimated 3,600 startups through 300 incubators.
The Startup India Seed Fund Scheme was earlier announced by PM Modi in January 2021to help budding entrepreneurs and startups in pursuing their innovative ideas.
At the launch of Startup India Seed Fund Schemehttps://t.co/yOhdoT3AeB
— Piyush Goyal (@PiyushGoyal) April 19, 2021
As the smaller towns in India are often not provided with appropriate funding, the scheme will help in creating a robust startup ecosystem in Tier 2 and 3 regions.
The Department for Promotion of Industry and Internal Trade is launching the scheme to facilitate startup funding at an early stage.
Grants of up to Rs. 5 crores will be provided to the eligible incubators selected by the Expert Advisory Committee.
The incubators selected by EAC will provide grants of up to Rs. 20 lakh for the validation of the prototype development, proof of concept, or product trials to startups.
Further, under the scheme, up to Rs. 50 lakh will be provided to the startups for commercialization, market-entry, or scaling up through debt-linked instruments or convertible debentures.
Rs. 945 crores will be divided over the next 4 years in order to provide seed funding to the eligible startups. It will be done through eligible incubators across the country.
The Minister said that he would like to especially encourage innovators from rural areas to come forward and benefit from this scheme.
While launching the scheme, the Union Minister stated that the scheme will support the domestic entrepreneurs as well as their business ideas that often are not able to take off because of the absence of critical capital at an early stage.