Industry Reactions To Startup India Seed Fund Launch

The government has dedicated a corpus of 945 crore rupees to provide seed funding to qualified startups in the next four years.

“Never forget, every major company was once a startup.”

Taranjit Singh Sandhu, Ambassador of India to the US.

Piyush Goyal, Minister of Railways, Commerce and Industry, Consumer Affairs and Food and Public Distribution, recently launched the Startup India Seed Fund Scheme. The government has dedicated a corpus of 945 crore rupees to provide seed funding to qualified startups through eligible incubators across India in the next four years.

The programme aims to help startups with proof of concept, prototype creation, product trials, market-entry, and commercialisation costs. “I hope good ideas don’t get sold very cheap, particularly to foreign investors, who are able to identify a good idea,” he said.

Anuj Krishna, Co-founder and Director, TheMathCompany, said, “In today’s highly competitive market, a majority of startups never move past the initial stages or even see the light of day because they lack the early capital/investment required to sustain themselves.”


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“As a startup, it’s very important to be able to nurture business ideas without any constraints. To this end, such funding will be pivotal to encouraging the right kind of growth in India’s promising startup environment,” said Krishna.

A springboard 

India is currently the third-largest startup ecosystem globally and is home to 21 unicorns valued at $73.2 billion.

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Abhishek Aggarwal, Co-Founder & CEO, Trinity Gaming, said, “Startups play a significant role in a country’s economic growth, especially for a country like India. The recent announcement of the Seed Fund Scheme is expected to provide entrepreneurs with a safe space that will avail them an environment to grow and inject competition into the industry.”

“Financial assistance provided by the government gives confidence and ensures healthy and constant growth of a startup ecosystem,” said Aggarwal. 

Ravinder Kumar, Founder & CEO, WIMWIsure, said, “The seed funding scheme will provide a new platform for the startups to raise funds in the initial days of the entrepreneurial journey. The majority of startups fail to go beyond the idea stage due to a lack of funds for initial deployment and identifying product-market fit.”

The dedicated seed fund will provide an option for new-age entrepreneurs to access funds that are not available through the traditional mode of loans and raising capital from family and friends, he added.

Tarun Gupta, Founder, Ultimate Battle, said, “Startup funding in India is mostly being done by foreign investments. Although this has helped the Indian market grow, it has left a chink in the Indian economy, as these startups are owned by foreign firms. This seed fund scheme by the government will empower the Indian incubation hubs domestically and will in turn help to boost the Indian economy.”

The road ahead

As per a survey, only seven percent of the startups have enough runway to see through the pandemic-induced crisis, while 38 percent said their war chests wouldn’t last for more than three months. Moreover, only 16 percent reported a growth in business during these troubled times. 

“Accelerators and incubators will be instrumental in finding and evaluating such startups and early-stage ideas. Permissions should be given to the respective evaluation body, and progress should be measured proactively in terms of values and timelines of scouting ideas and fund disbursements,” said Ravinder Kumar.

“The focus shall be given to incubators and accelerators at educational institutions to drive confidence in the student community for entrepreneurship. A lot of new venture ideas are pursued by students in their final years of education and often dropped due to financial constraints,” he further added. 

A robust and transparent policy framework, freedom from red-tapism and constant hand-holding are critical to a flourishing startups ecosystem. The new startup fund scheme is a step in the right direction.

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kumar Gandharv
Kumar Gandharv, PGD in English Journalism (IIMC, Delhi), is setting out on a journey as a tech Journalist at AIM. A keen observer of National and IR-related news.

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