Startup India Seed Fund Scheme (SISFS)
To build a startup conducive ecosystem the Government of India launched a Startup India Seed Fund Scheme on the 16th of January 2014 to provide opportunities for the growth of the enterprises.
Startup India Seed Fund Scheme (SISFS)
To build a startup conducive ecosystem the Government of India launched a Startup India Seed Fund Scheme on the 16th of January 2014 to provide opportunities for the growth of the enterprises.
Startup India Seed Fund Scheme Launch Date: Apr 1, 2021
The Startup India Seed Fund Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.
On February 5, 2021, the Government of India made an official announcement about the approval of SISFS. It has been approved for a period of four years and was implemented with effect from April 1, 2021.
Recently, the Government launched the Startup India Seed Fund Scheme (SISFS).
- The Scheme was announced during the ‘Prarambh: StartupIndia International Summit’ which marked the five-year anniversary of the Startup India initiative.
Key Points
- About the Startup India Seed Fund Scheme (SISFS):
- Aim: To provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.
- Launched by: Department for Promotion of Industry and Internal Trade (DPIIT) with an outlay of Rs. 945 Crore.
- Some Eligibility Conditions:
- A startup, recognized by DPIIT, was incorporated not more than 2 years ago at the time of application.
- Startups should not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme.
- Features:
- It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
- An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
- Grants of up to Rs. 5 crores will be provided to the eligible incubators selected by the committee.
- The selected incubators will provide grants of up to Rs. 20 lakh for validation of proof of concept, prototype development, or product trials to startups.
- Investments of up to Rs. 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
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- Expected Benefit:
- It will help in creating a robust startup ecosystem in Tier 2 and 3 regions, as the smaller towns in India are often not provided with appropriate funding.
- Expected Benefit:
- About Startup India Initiative:
- It envisages building a robust startup ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs. It was launched in 2016.
- The action plan of this initiative focuses on the following three areas:
- Simplification and Handholding.
- Funding Support and Incentives.
- Industry-Academia Partnership and Incubation.
- Related Government Initiatives:
- Startup Innovation Challenges: It is a fantastic opportunity for any startup to leverage their networking and fund-raising efforts.
- National Startup Awards: It seeks to recognize and reward outstanding startups and ecosystem enablers that are contributing to economic dynamism by spurring innovation and injecting competition.
- Ranking of States on Support to Startup Ecosystems: It is an evolved evaluation tool aimed to strengthen the support of States and UTs to holistically build their startup ecosystems.
- SCO Startup Forum: The first-ever Shanghai Cooperation Organisation (SCO) Startup Forum was launched in October 2020 to develop and improve startup ecosystems collectively.
- Prarambh: The ‘Prarambh’ Summit aims to provide a platform for startups and young minds from around the world to come up with new ideas, innovations, and inventions.
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. 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.
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.
To get DPIIT-recognized, please visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html
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 the development of 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 as per the guidelines of the scheme.
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 can apply for the SISFS. To get DPIIT-recognized, please visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html
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, defense, 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.
What is a DPIIT-recognized startup?
- An entity shall be considered a “Startup”
To get DPIIT-recognized, please visit
- If it’s incorporated as either a Private Limited Company or Registered Partnership Firm or Limited Liability Partnership. A sole proprietorship or a public limited company is not eligible as a startup
- If it is up to 10 years from the date of its incorporation/ registration
- If its turnover for any of the financial years has not exceeded INR 100 crore
- If it is working towards innovation, development, or improvement of products or processes or services, or if it is a scalable business model with a high potential for employment generation or wealth creation
- Should not have been formed by splitting up or reconstructing a business already in existence.
https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html
What can I use the seed fund for?
- Seed fund shall strictly not be used by startups for the creation of any facilities and shall be utilized for the purpose it has been granted for. A grant can be used for validation of Proof of Concept, prototype development, or product trials. A debt/ convertible debenture can be used for Market entry, Commercialization, or Scaling up.
Application Process
How can I apply to SISFS?
- An online call for applications is hosted on an ongoing basis on the Startup India portal will be opened soon. DPI-recognized startups can log in using the credentials used during the startup recognition process to apply for the scheme.
Evaluation Process
Who is going to review my application?
The application of each startup will be reviewed by an Incubator Seed Management Committee (ISMC) formed by the incubators you apply to. The committee will also be responsible for future assessment of the performance of the startup and disbursement of further tranches. Each ISMC constitutes of the following members:
- Nominee of Incubator (Chairman)
- A representative from the State Government’s Startup Nodal Team
- A representative of a Venture Capital Fund or Angel Network
- A domain expert from Industry
- A domain expert from academia
- Two successful Entrepreneurs
- Any other relevant Stakeholders
After Selection of Startups
I had filled the order of preference for incubators while applying. Can I change this preference order after application?
- Applications once filled and submitted are final. The preference order of the incubator cannot be changed at a later stage.
What is the Experts Advisory Committee (EAC) under SISFS?
DPIIT shall constitute an Expert Advisory Committee that will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme. The EAC will evaluate and select incubators for the allotment of Seed Funds, monitor progress, and take all necessary measures for efficient utilization of funds.
Members from different departments shall be appointed in EAC, which comprises:
- A Chairman
- Financial Advisor, DPIIT, or his representative
- Additional Secretary/ Joint Secretary/ Director/ Deputy Secretary, DPIIT
- One Representative each from:
- Department of Biotechnology (DBT)
- Department of Science & Technology (DST)
- Ministry of Electronics and Information Technology (MeiTY)
- Indian Council of Agricultural Research (ICAR)
- NITI Aayog
- At least three expert members were nominated by the Secretary, DPIIT from the startup ecosystem, investors, and experts in the domain of R&D, technology development and commercialization, entrepreneurship, and other relevant domains.
Application Procedure for Incubators
The application procedure for incubators to apply for the SISFS is as follows:
- Go to the official Startup India Seed Fund Scheme website.
- Click on the ‘Login’ button on the top right-hand side of the homepage.
- The ‘Login’ tab will open. Click on the ‘Create an Account’ option at the bottom of the tab.
- The registration page of the ‘Startup India’ website will open.
- Enter the name, email ID, mobile number, password, confirm the password and click on the ‘Register’ button.
- An OTP will be sent to the applicant’s registered mobile number. Enter the OTP and click on the ‘Submit’ button.
- Go to the official Startup India Seed Fund Scheme website and click on the ‘Apply Now button on the right-hand side of the homepage.
- Select the ‘Apply Now’ button under the ‘For Incubators’ option and log in using the username and password registered on the Startup India website.
- Select the country, click on the input letterbox and click on the ‘Next’ option.
- The application form will open. Enter all the details in the application form and click on the ‘Save Profile’ button.
- The profile will be sent to a moderator for approval. After approval, log in to the Startup India Seed Fund Scheme website.
- Click on ‘Apply Now’ under the seed fund scheme.
- Enter the details in the application form such as general detail, incubator support detail, incubator team detail, fund requirement details, etc.
- Upload the documents and click on the ‘Submit’ button.
On clicking the ‘Submit’ button, the incubator will have applied for the SISFS.
