The Startup India Seed Fund Scheme (SISFS) has achieved remarkable success, providing financial support to more than 1,000 startups through approved incubators.
According to Minister of State for Commerce and Industry, Som Parkash, "As on 30th April 2023, INR 611.36 Cr has been approved for 160 incubators by the Expert Advisory Committee (EAC) under SISFS. The approved incubators have selected 1,039 startups for support of INR 176.63 Cr."
Launched in 2021 with a corpus of INR 945 Cr for a four-year period, the SISFS aims to offer financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. Minister Som Parkash stated, "The scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialisation."
Funding Allocation and Incubators:
Minister Som Parkash revealed, "Vel Tech Technology Incubator approved an amount of INR 5 Cr for 29 startups as of April 30, 2023. Crescent Innovation and Incubation Council, Foundation for Innovation & Research in Science & Technology and Chitkara Innovation Incubator Foundation were in the second position, having approved funds for 24 startups each."
Minister Som Parkash clarified, "Startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible to get funding via one of the government-recognised incubators under the SISFS. Startups need to have at least 51% shareholding by Indian promoters to be eligible to get financial assistance under the scheme."
Investment Trends and Fintech Sector:
The Startup India Seed Fund Scheme is part of the government's efforts to expand the country's startup ecosystem. According to Minister Som Parkash, "The minister also said that the number of recognised startups in the country grew to 98,119 as of April 30, 2023, from 428 in 2016."
Although seed funding experienced a decline over the last few quarters, schemes like SISFS have continued to support startups. According to Inc42 data, seed-stage startups raised only $479 Mn across 233 deals during the first half of 2023, a drop of 53% from $1.02 Bn in the second half of 2022. Minister Som Parkash informed, "There are 3,085 Department for Promotion of Industry and Internal Trade (DPIIT)-recognised fintech startups in the country."
Minister Som Parkash highlighted the government's efforts to boost the local fintech ecosystem, stating, "The government does not maintain central data on investment trends in the fintech space in the last five years. Parkash also touted a slew of steps the Center undertook to boost the local fintech ecosystem. Citing initiatives such as the unified payments interface (UPI) and the fintech hub International Financial Services Centre (IFSC), the government said that its initiatives aim to ‘strengthen the vision of making India a global fintech hub.'"