Startup India Seed Fund Scheme

Introduction to SISFS

The Startup India Seed Fund Scheme (SISFS), launched on April 19, 2021, by the Department for Promotion of Industry and Internal Trade (DPIIT), aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. With an outlay of ₹945 crore, the scheme is set to support approximately 3,600 startups through 300 incubators over four years.

Purpose of SISFS

SISFS addresses the capital inadequacy faced by startups in their early stages, facilitating:

Proof of Concept and Prototype Development

Enabling startups to validate and refine their innovative ideas.

Product Trials and Market Entry

Assisting in testing products and entering the market effectively.

Commercialization

Supporting the scaling of operations to attract further investments.

Eligibility Criteria

To be eligible for SISFS, startups must:

Be DPIIT-recognized

Startups should be recognized by the Department for Promotion of Industry and Internal Trade.

Incorporation Period

The startup must be incorporated not more than 2 years ago at the time of application.

Business Stage

The startup should be at the ideation stage, prototype stage, or validation stage.

Shareholding

Indian promoters must hold at least 51% of the startup’s shares.

Innovative Solutions

Preference is 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.

Application Process

Startups can apply for SISFS through the following steps.

Online Application

Submit an application via the Startup India portal, providing detailed information about the business idea, team, and market potential.

Incubator Selection

Choose up to three preferred incubators for evaluation.

Evaluation

Incubators assess applications based on criteria such as innovation, market potential, and team capability.

Funding Decision

Selected startups receive seed funding through the incubator.

Funding Details

The scheme provides financial assistance as follows:

For Proof of Concept, Prototype Development, or Product Trials

Up to ₹20 lakh per startup.

For Market Entry and Commercialization

Funds are disbursed through convertible debentures, debt-linked instruments, or grants, depending on the stage and requirements of the startup.

Benefits of SISFS

Early-Stage Support

Provides critical capital during the formative stages of startups.

Facilitates Growth

Incubators assess applications based on criteria such as innovation, market potential, and team capability.

Encourages Innovation

Promotes the development of innovative solutions across various sectors.

Frequently Asked Questions (FAQs)

What is the Startup India Seed Fund Scheme (SISFS)?

SISFS is a government initiative to provide financial assistance to early-stage startups for proof of concept, prototype development, product trials, market entry, and commercialization.

Who is eligible to apply for SISFS?

Startups recognized by DPIIT, incorporated not more than 2 years ago, with at least 51% shareholding by Indian promoters, are eligible.

How can a startup apply for SISFS?

Startups can apply online through the Startup India portal, selecting up to three preferred incubators for evaluation.

What is the maximum funding a startup can receive under SISFS?

Startups can receive up to ₹20 lakh for proof of concept, prototype development, or product trials, and up to ₹50 lakh for market entry and commercialization.

Is there any sectoral preference for SISFS funding?

While SISFS is sector-agnostic, preference is 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.