Startup India Seed Fund 

Why in News? 

Rs 1,000-crore ‘Startup India Seed Fund’ was launched during the ‘Prarambh: Startup India International Summit’. 

 Salient features of Startup India Seed Fund Scheme: 

  • ObjectiveFund has been set up to provide initial capital to the startupsAfter that start-ups will be provided with the Govt. Guarantees, to help them raise debt capital. 
  • Coverage: The fund would offer financial assistance to startups for proofs of concept, prototype development, product trials, market-entry, and commercialization of products or ideas. 
  • Funding: The Scheme will offer startups up to Rs. 20 Lakhs as grant for Proof of Concept. Upto Rs. 50 Lakhs can also be availed through convertible debentures or debt or debt-linked instruments for commercialization. 

 Fund of Funds for Start-ups(FFS) Scheme: 

  • It was launched by the Prime Minister in 2016 in line with the Start-up India Action Plan. 
  • Purpose: The fund has a corpus of INR 10,000 crore and is managed by Small Industries Bank of India(SIDBI) for contribution to the corpus of Alternative Investment funds(AIFs) which in turn invest in equity and equitylinked instruments of various Startups. 

 Startups in India: 

  • India is home to the world’s thirdlargest startup ecosystem. There are over 41,000 startups in the country. 
  • In 2014, there were only four startups in the unicorn club but in 2020 there are more than 30. Further, 11 of these startups entered the unicorn club in 2020 itself.  
  • The startups in India are not limited to big cities and about 40% of such budding entrepreneurs are coming from tier-II and -III cities. 

 Further Reading on Prarambh Summit:

Print Friendly and PDF