Over 1,400 Startups Incubated Under Startup India Scheme

The Startup India Seed Fund Scheme (SISFS) incubated 656 startups over the course of the last two years, Minister of State (MoS) for Commerce and Industry Som Parkash informed the Parliament. 

The startups were supported through as many as 126 incubators approved under the Centre’s flagship scheme. The SISFS onboarded as may as 304 startups in the financial year 2021-22 (FY22), while it extended support to an additional 352 startups in FY23 (till November 2022). 

A majority of the incubated startups were based out of Karnataka (126), followed closely by Maharashtra (104), Tamil Nadu (51), Gujarat (49) and Telangana (46).

The minister also said that 773 startups have so far been supported under the Fund of Funds for Startups (FFS) scheme. Giving a breakdown of the data, he said that 120 startups were incubated under the FFS scheme in FY20, while another 86 startups were mentored in FY21. 

156 startups were onboarded in FY22 while an additional 191 companies have been incubated in FY23 till November 2022 as part of the funds of funds scheme. 

Karnataka emerged as the biggest beneficiary of the FFS scheme as it incubated 235 startups, followed by Maharashtra with 173 startups and Delhi with 136 startups. 

In a written reply, Parkash also informed the Parliament that India is currently home to 84,012 DPIIT-recognised startups across multiple sectors. 

Jumpstarting The Ecosystem

The SISFS and FFS schemes, along with the credit guarantee scheme, are part of the larger Startup India initiative aimed at streamlining capital requirements of startups at various stages of their business cycle. 

The Startup India Seed Fund Scheme was established in April of 2021 with an outlay of INR 945 Cr for a period of four years. The scheme aims to provide financial assistance to startups at multiple stages of development, including proof of concept, prototype development, product trials, market entry and commercialization. 

So far, INR 455.25 Cr has been approved for 126 incubators, which are then earmarked for their respective startup applications. 

On the other hand, Fund of Funds was established in 2016 with a corpus fund of INR 10,000 crore to enable access to domestic capital for growing homegrown startups. Under the scheme, the fund invests into SEBI-registered Alternative Investment Funds (AIFs), which then invest in startups. 

The government claims to have committed more than INR 7,528 Cr to 93 AIFs through the Fund of Funds. In turn, AIFs have invested in 773 startups till date. 

Overall, the Startup India scheme has adopted a multi-pronged approach to scale the ecosystem. The government recently informed the Parliament that so far 10,000 Atal Tinkering Labs (ATLs) and 69 Atal Innovation Centres (AICs) have been operationalised. 

These AICs have incubated over 2,900 startups and created more than 15,000 jobs. More than 480 intellectual properties have also been generated and 800 training programmes have been conducted at AICs across the country. 

However, the Indian startup ecosystem has been engulfed by a funding winter for the last few months. The bearish sentiment continued in November 2022 as well, with funding raised by Indian startups falling 73% year-on-year to $1.1 Bn.