Startup India Seed Fund Scheme (SISFS) is a Government of India scheme implemented by DPIIT that provides early-stage financial assistance to DPIIT-recognised startups through approved incubators. Eligible startups can receive grants up to Rs. 20 lakh for proof of concept and prototype development, and investment up to Rs. 50 lakh for market entry and commercialisation through the official Startup India Seed Fund Portal.
Startup India Seed Fund Scheme Highlights | |
|---|---|
| Scheme Name | Startup India Seed Fund Scheme (SISFS) |
| Announced By | Prime Minister Narendra Modi on 16 January 2021 |
| Operationalised From | 1 April 2021 |
| Implemented By | Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry |
| Total Corpus | Rs. 945 crore for 4 years starting from 2021-22 |
| Main Objective | Provide early-stage funding to DPIIT-recognised startups for proof of concept, prototype development, product trials, market entry, and commercialisation |
| Grant Support | Up to Rs. 20 lakh for proof of concept, prototype development, and product trials |
| Investment Support | Up to Rs. 50 lakh for market entry, commercialisation, and scaling through convertible debentures |
| Interest Rate on Investment | Not more than the prevailing repo rate |
| Loan Tenure | Up to 60 months (5 years) |
| Moratorium Period | Up to 12 months |
| Collateral Required | No, completely unsecured |
| Startup Age Limit | Incorporated not more than 2 years before the date of application |
| Indian Promoter Shareholding | Minimum 51% at time of application |
| Prior Government Funding Limit | Not more than Rs. 10 lakh from any Central or State Government scheme |
| Maximum Incubators per Application | Up to 3 incubators simultaneously |
| Selection Timeline | ISMC must select startups within 45 days of receiving the application |
| Incubator Fee for Startups | No fee is charged at any stage |
| Incubators Selected So Far | 198 incubators as of December 2023 |
| Startups Supported So Far | 1,740 startups as of December 2023 |
| Official Portal | seedfund.startupindia.gov.in |
Introduction of Startup India Seed Fund Scheme: A Brief Insight
Every year, thousands of entrepreneurs in India build genuinely innovative ideas but fail to take them forward simply because they cannot access early-stage funding. Angel investors want a working prototype before they invest. Banks want collateral and credit history. Venture capital firms want proven market traction. This creates a critical funding gap at the earliest stage of a startup’s journey, where the idea exists but the resources to validate it do not. The Startup India Seed Fund Scheme was built specifically to fill this gap.
Prime Minister Narendra Modi announced the Startup India Seed Fund Scheme (SISFS) on 16 January 2021 at the Prarambh: Startup India International Summit, marking the 5th anniversary of the Startup India initiative. The scheme was operationalised from 1 April 2021 with a total corpus of Rs. 945 crore for a period of 4 years starting from 2021-22. It is implemented by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry through approved incubators across India.
SISFS provides two types of financial assistance to eligible startups. The first is a grant of up to Rs. 20 lakh for validation of Proof of Concept, prototype development, or product trials. The second is an investment of up to Rs. 50 lakh for market entry, commercialisation, or scaling up through convertible debentures or debt-linked instruments. The investment carries interest at not more than the prevailing repo rate, has a tenure of up to 60 months, and is completely unsecured with no guarantor required.
The scheme does not give money directly to startups. Instead, DPIIT constitutes an Expert Advisory Committee (EAC) that evaluates and selects eligible incubators across India. Each selected incubator receives up to Rs. 5 crore in grant funding and is then responsible for shortlisting and funding eligible startups through an Incubator Seed Management Committee (ISMC). Startups can apply to up to 3 incubators simultaneously on the Startup India Portal, and the ISMC must complete the selection process within 45 days of receiving the application. No fee is charged to startups at any stage by the incubator or its staff.
To apply under SISFS, a startup must first obtain DPIIT recognition. Without valid DPIIT recognition, no startup can access any benefit under the scheme. The complete benefits of DPIIT recognition, including income tax exemption, Angel Tax exemption, compliance relaxations, and IPR support are explained in detail on our Startup India Scheme page. Startups that have already progressed beyond the seed stage and need larger institutional debt funding can also explore the Credit Guarantee Scheme for Startups (CGSS), which provides government-backed guarantee cover for collateral-free loans up to Rs. 20 crore through banks and NBFCs. Women entrepreneurs and SC/ST founders who want to set up greenfield enterprises can additionally explore the Stand Up India Scheme, which provides institutional loans from Rs. 10 lakh to Rs. 1 crore.
As of 31 December 2023, 198 incubators have been selected under SISFS with Rs. 802.98 crore approved for incubators. A total of 1,740 startups have been selected by approved incubators with Rs. 306.43 crore approved to startups. The scheme is expected to support approximately 3,600 startups through 300 incubators over its full term.
Entrepreneurs and startup founders looking for more funding support, government schemes for startups, business loan programmes, and Central Government entrepreneurship initiatives can also explore our complete Central Government Schemes List for detailed information according to their business stage and funding requirements.
How Startup India Seed Fund Scheme Actually Works
SISFS does not transfer money directly into a startup’s bank account. The scheme works through a structured three-level flow involving DPIIT, approved incubators, and eligible startups. Here is how the complete process works.
DPIIT constitutes an Expert Advisory Committee (EAC), which evaluates and selects eligible incubators across India. Each selected incubator receives a grant of up to Rs. 5 crore from DPIIT in milestone-based instalments. The incubator then forms an Incubator Seed Management Committee (ISMC) comprising venture capital representatives, domain experts, successful entrepreneurs, and state government nominees. This ISMC evaluates startup applications and selects eligible startups for seed funding. The selected startup receives the funding from the incubator, not from DPIIT directly. The incubator is also responsible for providing mentoring, infrastructure support, investor networking, and capacity building to the selected startups throughout the incubation period.
Grant vs Investment Support Under SISFS
SISFS provides two distinct types of financial assistance depending on the stage of the startup. Understanding the difference helps founders decide which type of support they need to apply for.
| Feature | Grant Support | Investment Support |
|---|---|---|
| Maximum Amount | Up to Rs. 20 lakh | Up to Rs. 50 lakh |
| Purpose | Proof of Concept validation, prototype development, product trials | Market entry, commercialisation, scaling up |
| Type of Assistance | Non-repayable grant | Convertible debentures or debt-linked instruments |
| Interest Rate | Not applicable | Not more than the prevailing repo rate |
| Tenure | Not applicable | Up to 60 months (5 years) |
| Moratorium | Not applicable | Up to 12 months |
| Collateral Required | No | No, completely unsecured |
| Disbursement Mode | Milestone-based installments | As per the agreement between the startup and the incubator |
Benefits Provided to Eligible Startups
The Startup India Seed Fund Scheme provides two types of financial assistance to eligible startups through approved incubators across India.
Grant Support
- Eligible startups receive grants of up to Rs. 20 lakh for validation of Proof of Concept, prototype development, or product trials
- Grant is disbursed in milestone-based instalments linked to product development progress
- Milestones include prototype development, product testing, and product readiness for market launch
- Grant funds must be used strictly for the stated purpose and cannot be used for facility creation
- The first instalment of the grant is released within 60 days of receipt of the application from the startup
Investment Support
- Eligible startups receive investment of up to Rs. 50 lakh for market entry, commercialisation, or scaling up
- Investment is provided through convertible debentures, debt, or debt-linked instruments
- Interest rate is capped at not more than the prevailing repo rate
- Loan tenure is fixed at not more than 60 months (5 years)
- A moratorium of up to 12 months may be provided to startups
- Funding is unsecured, and no guarantee from the promoter or a third party is required
Additional Benefits
- Incubator provides physical infrastructure, mentoring, and networking support to selected startups
- Startups get access to testing facilities, investor networks, and national and international events through the incubator
- No fee is charged to startups by the incubator or its staff at any stage of selection, disbursement, or monitoring
- Startups can apply to up to 3 incubators simultaneously to maximise their chances of selection
- Application status can be tracked in real time on the Startup India Portal
Eligibility Conditions Required to be Fulfilled
Startups must meet the following conditions confirmed from the official SISFS Guidelines issued by DPIIT before applying under the Startup India Seed Fund Scheme.
- A startup must hold a valid DPIIT recognition issued through the Startup India Portal
- The startup must be incorporated not more than 2 years before the date of application to the incubator
- A startup must have a business idea with market fit, viable commercialisation, and scope of scaling
- A startup must use technology in its core product, service, business model, distribution model, or methodology
- The startup must not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme
- Indian promoters must hold at least 51% shareholding in the startup at the time of application
- A startup will not receive seed support more than once under each category of grant and investment
Important: The following types of support are NOT counted towards the Rs. 10 lakh limit:
- Prize money from competitions and grand challenges
- Subsidised working space
- Founder’s monthly allowance
- Access to labs or prototyping facilities
Priority Sectors Under SISFS
While the scheme is open to startups across all sectors, DPIIT gives preference to startups creating innovative solutions in the following areas.
- Social impact
- Waste management and water management
- Financial inclusion
- Education
- Agriculture and food processing
- Biotechnology and healthcare
- Energy and mobility
- Defence, space, and railways
- Oil and gas and textiles
Documents Required to be Attached
Startups applying under the Startup India Seed Fund Scheme through eligible incubators should keep the following documents ready before submitting their application on the Startup India Portal.
- DPIIT Recognition Certificate
- Certificate of Incorporation
- PAN Card of the entity
- Details of the founders and the team profile
- Problem statement and product or service overview
- Business model and market size details
- Pitch deck or business plan
- Prototype details or product development roadmap, wherever applicable
- Quantum of funds required and projected utilisation plan
- Financial projections of the business
- Bank account details of the entity
- Shareholding pattern confirming at least 51% Indian promoter shareholding
The exact document requirements may vary across incubators. Startups should confirm the specific requirements with the selected incubator before submitting their application.
How Startups Can Apply Under the Startup India Seed Fund Scheme
The Startup India Seed Fund Scheme works through a structured application and selection process involving DPIIT, the Expert Advisory Committee (EAC), approved incubators, and the Incubator Seed Management Committee (ISMC). Here is the complete step-by-step process.
Step 1: Obtain DPIIT recognition through the official Startup India Portal. DPIIT recognition is mandatory before a startup can apply under SISFS.
Step 2: Visit the official Startup India Seed Fund Scheme Portal and register using your startup credentials.
Step 3: Browse the list of approved incubators available on the portal and select up to 3 incubators in order of your preference. Startups can apply to multiple incubators simultaneously to increase their chances of selection.
Step 4: Submit your application with all required details, including team profile, problem statement, product overview, business model, market size, funding requirement, and projected utilisation plan.
Step 5: The selected incubators review your application and shortlist candidates based on the SISFS eligibility criteria outlined in the official guidelines.
Step 6: Shortlisted startups are invited to present before the Incubator Seed Management Committee (ISMC). The ISMC evaluates startups on innovation, scalability, market potential, team strength, and fund utilisation plan.
Step 7: ISMC selects eligible startups within 45 days of receipt of application. All applicants receive real-time status updates on the Startup India Portal. Rejected applicants are notified by email and can apply afresh.
Step 8: If both Preference 1 and Preference 2 incubators select the same startup, the funding is provided by the Preference 1 incubator. If Preference 1 rejects and Preference 2 selects, funding is provided by the Preference 2 incubator.
Step 9: Selected startups receive funding from the incubator in milestone-based instalments. Grant of up to Rs. 20 lakh for PoC and prototype, and investment of up to Rs. 50 lakh for market entry and commercialisation through convertible debentures.
Step 10: Startups submit progress reports and utilisation certificates to trigger the release of subsequent installments. A final report and audited utilisation certificate are submitted at the end of the project duration.
Can Startups Apply to Multiple Incubators Under SISFS?
Yes. The official SISFS guidelines confirmed by DPIIT allow startups to apply to up to 3 incubators simultaneously in order of preference. This is one of the most important features of the scheme that many startups are unaware of.
If the Preference 1 incubator and Preference 2 incubator both select the same startup, the funding is provided by the Preference 1 incubator. If the Preference 1 incubator rejects the application and the Preference 2 incubator selects it, the funding is provided by the Preference 2 incubator, and so on. This preference-based system ensures that startups get the best possible chance of selection without having to wait for one rejection before approaching another incubator.
Startups can track the real-time status of their application across all selected incubators on the Startup India Portal. Rejected applicants are notified by email and can apply afresh under the scheme.
Important Links Available
- Startup India Seed Fund Scheme Official Portal.
- Apply for DPIIT Recognition, Startup India Portal.
- Official SISFS Guidelines PDF, DPIIT.
- Startup India Official Portal.
- PIB, Startup India Seed Fund Scheme Launch Notification.
- Department for Promotion of Industry and Internal Trade, DPIIT.
Contact Details in Case of Help Needed
Startups facing issues related to SISFS application, incubator selection, eligibility, or funding queries can contact through the following official channels.
- Startup India Toll Free Helpline: 1800 115 565 (Available 10:00 AM to 05:30 PM)
- Department for Promotion of Industry and Internal Trade (DPIIT)
Udyog Bhawan, Rafi Marg,
New Delhi 110011
Frequently Asked Questions (FAQs)
Q. What is the Startup India Seed Fund Scheme?
Ans. Startup India Seed Fund Scheme (SISFS) is a Government of India scheme implemented by DPIIT that provides early-stage financial assistance to DPIIT-recognised startups for proof of concept, prototype development, product trials, market entry, and commercialisation through approved incubators across India.
Q. What is the total corpus of SISFS?
Ans. The total corpus of the Startup India Seed Fund Scheme is Rs. 945 crore for a period of 4 years starting from 2021-22.
Q. Does SISFS give money directly to startups?
Ans. No. SISFS does not give money directly to startups. Funds are disbursed to eligible startups through approved incubators selected by the Expert Advisory Committee (EAC).
Q. What are the two types of financial assistance available under SISFS?
Ans. SISFS provides grants of up to Rs. 20 lakh for proof of concept, prototype development, and product trials, and investment of up to Rs. 50 lakh for market entry, commercialisation, and scaling through convertible debentures or debt-linked instruments.
Q. Is DPIIT recognition mandatory for applying under SISFS?
Ans. Yes. A startup must hold valid DPIIT recognition and must have been incorporated not more than 2 years before the date of application to the incubator.
Q. Can a startup apply to multiple incubators simultaneously?
Ans. Yes. A startup can apply to up to 3 incubators simultaneously in order of preference. If the Preference 1 incubator rejects the application and Preference 2 selects it, funding is provided by the Preference 2 incubator.
Q. What is the maximum government scheme support allowed before applying under SISFS?
Ans. A startup must not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme. Prize money, subsidised workspace, founder allowance, and lab access are not counted towards this limit.
Q. What is the interest rate on investment support under SISFS?
Ans. The interest rate on investment provided through convertible debentures or debt instruments is capped at not more than the prevailing repo rate at the time of disbursement.
Q. Is any collateral or guarantee required for the investment support?
Ans. No. The investment support under SISFS is unsecured. No guarantee from the promoter or any third party is required.
Q. How long does the incubator take to select startups?
Ans. The Incubator Seed Management Committee (ISMC) must select startups within 45 days of receipt of the application.
Q. Can a rejected startup apply again under SISFS?
Ans. Yes. A startup that is rejected can apply afresh under the scheme.
Q. What shareholding condition applies under SISFS?
Ans. Indian promoters must hold at least 51% shareholding in the startup at the time of application to the incubator.
Q. Is any fee charged by incubators under SISFS?
Ans. No. The incubator or any of its staff members cannot charge any fee in cash or in kind from applicants or beneficiaries under the scheme at any stage.
Q. When was SISFS launched and operationalised?
Ans. SISFS was announced by Prime Minister Narendra Modi on 16 January 2021 and was operationalised from 1 April 2021.
Tabassum is a government schemes researcher and writer with 5 years of experience tracking Central and State welfare programmes across India. She has covered 500+ schemes spanning agriculture, women welfare, education, and housing, helping lakhs of beneficiaries understand their entitlements in simple language.