Start-up India Seed Fund Receives Great Funding: A Move To Catalyse, Analyse And Support Start-ups!
On January 16, 2021, the Start-up India Seed Fund Scheme was unveiled to support over 3,600 businesses through 300 incubators.
According to a senior DPIIT official, the DPIIT has allotted 611 crores, or around two-thirds of the 945 crores allowed under the Start-up India Seed Fund Scheme, for four years (2021-25), and expects to seek further money. The funds have been distributed to over 160 incubators, which are then dispersing them to over 1,000 chosen start-ups across the country. Manmeet Nanda, Joint Secretary, DPIIT, stated that further funding will be requested.
They have observed an increase in the last two years. The scheme is becoming increasingly popular. They can resolve future finance requirements in six to ten months. Education technology, food processing, agri-tech, electronic vehicles, and health and wellness are among the major sectors benefiting from the plan.
Brief details of Start-up funding.
On January 16, 2021, the Start-up India Seed Fund Scheme was unveiled to support over 3,600 businesses through 300 incubators. Incubators give physical infrastructure, assistance with idea testing and validation, mentorship, and other services to selected entrepreneurs. It is a sector-agnostic plan, according to Nanda, with funding available in the form of grants of up to 20,00,000 and debt-linked instruments of up to 50 lacks. The fund prioritises tier 2/3 cities, with 99 of the 160 selected incubators in such areas.
Why are incubators important?
Incubators are critical to the success of companies. They provide essential resources, such as infrastructure, mentorship, and financial assistance, to develop and encourage start-up innovation. India has about 400 incubators, most in their early stages. Startup India intends to improve the capacity of current incubators while also assisting in establishing new incubators.
According to Nanda, the DPIIT also proposes a third-party impartial evaluation of the Startup India Seed Fund Scheme to assess how it has benefited entrepreneurs and incubators. They will be given comments on how to enhance their work. India has the world’s third-largest start-up ecosystem, with 97,970 registered start-ups.
The assessment of start-ups.
According to a senior government source, the DPIIT is conducting a third-party evaluation of the Rs 945-crore Startup India Seed Fund Scheme to determine its impact on the ground. The programme is designed to help entrepreneurs with proof of concept, prototype development, product testing, market entrance, and commercialisation.
A third party is now evaluating the start-up India seed money plan. The National Institute of Financial Management (NIFM) oversees it. They will conduct an impartial evaluation of how the initiative has benefited people. They will review the effectiveness of the businesses and incubators to see how this money has led to more chances, and they will also provide comments on how they can enhance our work, according to Nanda.
Is the global situation favourable to Indian start-ups?
Following the failure of the California-based SVB, the government previously stated that Indian startups had not experienced a drop in funding and that India’s startup ecosystem is strong and resilient. Manmeet Nanda, who works in the Indian startup ecosystem, stated that she does not anticipate any problems with the financial requirements of Indian entrepreneurs. Her comment is significant in light of several Indian startups and venture capital organisations who have exposure to the US and are concerned about their cash parked with Silicon Valley Bank.
However, compared to the same period in 2018, the startup ecosystem in India saw a significant drop in investment in the first quarter of 2023. Fortunately, she refers to it as a system readjustment because they have not seen a drop in funding in this manner.
Conclusion.
The DPIIT has had discussions with the Indian Banking Association to take proactive efforts to reach out to Indian startups, understand their financial needs, and determine how to expand their penetration to various banks across various industries. Nanda also stated that the number of DPIIT registered startups has increased by 40% in the previous year to roughly 29,000, bringing the total number of registered startups to 95,000. Healthcare, life sciences, education, agriculture, and professional and commercial services are the major startup industries. The major states are Maharashtra, Karnataka, Delhi, Uttar Pradesh, and Gujarat.
Edited By, Naveenika Chauhan
