Government Enhances Startup Ecosystem with Fund of Funds, Seed Fund Support, and Credit Guarantee Fund Under Startup India
The Indian government launched the Startup India initiative on January 16, 2016, aiming to create a robust ecosystem for innovation and entrepreneurship. This initiative includes three key schemes: the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS). These programs are designed to provide financial support to startups at various stages of their development, fostering growth and investment in the sector.
Fund of Funds for Startups
The Fund of Funds for Startups (FFS) is a pivotal component of the Startup India initiative, aimed at stimulating venture capital investments. Managed by the Small Industries Development Bank of India (SIDBI), this fund allocates capital to Alternative Investment Funds (AIFs) that are registered with the Securities and Exchange Board of India (SEBI). These AIFs are mandated to invest at least double the amount they receive from the FFS into startups. As of June 30, 2025, the FFS has made net commitments totaling ₹9,994 crore to 141 AIFs. This financial backing is crucial for startups seeking to scale their operations and innovate in various sectors.
Startup India Seed Fund Scheme
The Startup India Seed Fund Scheme (SISFS) was introduced to provide essential financial assistance to seed-stage startups through incubators. Launched on April 1, 2021, the SISFS has approved ₹945 crore for 219 incubators by June 30, 2025. This scheme plays a vital role in nurturing early-stage startups, offering them the resources and support needed to develop their ideas into viable businesses. By collaborating with incubators, the SISFS ensures that startups receive mentorship and guidance alongside financial support, enhancing their chances of success in a competitive market.
Credit Guarantee Scheme for Startups
The Credit Guarantee Scheme for Startups (CGSS) aims to facilitate collateral-free loans for startups through eligible financial institutions. Operational since April 1, 2023, the CGSS is managed by the National Credit Guarantee Trustee Company (NCGTC) Limited. As of June 30, 2025, the scheme has guaranteed 289 loans amounting to ₹667.85 crore for startup borrowers. This initiative is particularly beneficial for startups that may struggle to secure traditional financing due to a lack of collateral, thus enabling them to access the capital necessary for growth and innovation.
Project Swavalambini: Empowering Women Entrepreneurs
In addition to the financial schemes, the Ministry of Skill Development and Entrepreneurship (MSDE) is implementing Project Swavalambini to promote entrepreneurship among women. This initiative is carried out through autonomous institutes such as the National Institute for Entrepreneurship and Small Business Development (NIESBUD) and the Indian Institute of Entrepreneurship (IIE), in collaboration with NITI Aayog and its Women Entrepreneurship Platform (WEP). Launched as a pilot in select colleges and universities across Uttar Pradesh, Telangana, Meghalaya, Mizoram, and Assam, the project aims to cultivate an entrepreneurial mindset among women students. It includes Entrepreneurship Awareness Training and Development Training for students, as well as Faculty Development Programs (FDP) for educators. By June 30, 2025, the project has successfully organized awareness programs for 591 students and completed FDPs for 43 faculty members, contributing to the empowerment of women in entrepreneurship.
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