Startup India Seed Fund Scheme (SISFS)

What is it?

Many new startups stall not because the idea is bad but because there is no money to build a first working version and prove it works. Banks do not lend against an untested idea, and private investors usually come in only after there is a product. The Startup India Seed Fund Scheme is designed to fill that gap with government money.

The scheme has a total corpus of Rs 945 crore. The money is not handed over directly by the government. It is routed through incubators - institutions attached to universities, research institutes and industry bodies that are selected under the scheme. Startups apply to an incubator, and the incubator disburses the funds and provides support.

There are two kinds of support. The first is a grant of up to Rs 20 lakh for "validation of Proof of Concept, or prototype development, or product trials", released in stages against agreed milestones. The second is up to Rs 50 lakh for market entry, commercialisation and scaling up, provided not as a grant but through convertible debentures or debt or debt-linked instruments - meaning it is either repaid or converts into a shareholding in the company.

The published conditions are that the applicant must be a startup recognised by DPIIT (the Department for Promotion of Industry and Internal Trade), incorporated not more than 2 years ago at the time of applying. The business should have technology in its core product, service or business model, and should show viable commercialisation and scope for scaling.

The incubators themselves must meet conditions - operating for at least two years, having facilities for at least 25 occupants, and supporting at least 5 startups at the time of application. The scheme is designed to assist about 3,600 entrepreneurs through 300 incubators over four years. A common misunderstanding: the Rs 50 lakh portion is not a gift. Only the Rs 20 lakh proof-of-concept portion is a grant.

Potential benefit

₹20,00,000 – ₹50,00,000 one time

Up to Rs 20 lakh as a grant for validation of proof of concept, prototype development or product trials, disbursed in milestone-based instalments. Up to Rs 50 lakh for market entry, commercialisation or scaling up, provided through convertible debentures, debt or debt-linked instruments rather than as a grant. The scheme has a total corpus of Rs 945 crore and is designed to support about 3,600 entrepreneurs through 300 incubators over four years.

Who can apply?

Other conditions stated by the government

• The startup must be "recognized by DPIIT".
• The startup must be "incorporated not more than 2 years ago" at the time of application.
• The startup should have technology integrated into its core product, service, business model, distribution model or methodology.
• The business idea should show "viable commercialization, and scope of scaling".
• Applications are made to incubators selected under the scheme; incubators must have been operating for at least two years, have facilities for 25 or more occupants, and be supporting at least 5 startups at the time of applying.
• No age limit and no personal income ceiling for founders are stated on the official page checked.

Eligibility information is provided for informational purposes only. Final eligibility and approval are determined by the relevant government authority.

How to apply

DPIIT recognition is obtained first on the Startup India portal. The application is then submitted on the Startup India Seed Fund portal (seedfund.startupindia.gov.in), selecting the incubators to apply to. The incubator evaluates the application and, on selection, signs an agreement with the startup and releases funds against agreed milestones.

Where to apply: online

Deadline

No fixed deadline. Applications are accepted on a rolling basis.