The Indian Government started the Startup India scheme to encourage entrepreneurs to launch their startups. Moreover, the scheme offers incentives to startups and offers them a facility for receiving funding to run and operate the business. The program was launched in 2016, and many startups have registered themselves under the scheme. We will discuss the impact of the Startup India scheme on the Indian startup ecosystem and how it has helped startups.
Growth Of The Startup Ecosystem
To begin with, the Indian ecosystem has witnessed immense growth due to the Startup India program. Not to mention, our country ranks third globally for being the most prominent startup ecosystem. India’s economy has boomed thanks to the internet, technological advancements, and digital technologies. Admittedly, many qualified and skilled professionals form the talent pool. The number of startups in India is enormous. Firstly, there were 471 startups in India in 2016. After that, the number rose to 72,993 startups in 2022. Over time, there has been an enormous 15400 per cent increase in startups from 2016 to 2022. Startup India is giving encouragement and support to the startup ecosystem.
Rise In Job Opportunities And Entrepreneurship
The Startup India scheme has increased the number of jobs in startups. That said, it is helping people start their startups and become entrepreneurs. New entrepreneurs currently focus on launching startups that offer unique solutions to people’s problems. Additionally, these startups create employment opportunities and hire professionals on a large scale. According to online data, Indian startups created more than seven lakh jobs by March 2022.
Access To Funding
The Government of India offers funding facilities under Startup India. The funding sources can include:
1. Equity Financing
Firstly, business owners can get capital from equity financing. It involves selling equity and earning money to fund the business. Also, you don’t need to repay investments in equity of sale. Negatively, a startup has to share the ownership of its company with others.
2. Debt Financing
Secondly, a startup can get funding from the debt financing option. To explain, you can borrow money from a lender and repay it with some interest. The startup doesn’t give control of its business to the lender in this option. Conversely, the lenders ask you for collateral as a guarantee.
3. Grants
Lastly, a startup can get funds from grants given to them. In other words, it is a financial reward you get as a prize for your performance. Another critical point is that you don’t need to repay the money you get from a grant. The negative aspect of a grant is that you may fail in your business goals. Sometimes, the grant is promised, but it doesn’t reach you.
Startup India Seed Fund Scheme
The scheme was launched in April 2021 by Honorable Minister Shri Piyush Goyal. To explain, the scheme aims to provide financial help to a startup in its early stage. Entrepreneurs can apply for the scheme and get capital to fulfil their needs:
- They must submit a proof of concept to be eligible for funding.
- They gain wealth for prototype development and testing of their products.
- The money through the scheme helps market entry and business start.
It also helps in commercializing a business.
Moreover, the Startup India Seed Fund scheme allows you to get capital from angel investors and a loan from commercial banks. Furthermore, you get venture capital from VCs or Venture Capitalists and loans from financial institutions.
Eligibility Criteria
You must fulfil the eligibility criteria to apply for the Startup India Seed Fund scheme.
- If DPIIT recognizes your company, you are eligible for the scheme.
- You need to incorporate your startup. The incorporation should be at most 2 years old.
- Your business idea should have a market with scope for commercialization.
- Your business should be scalable.
Support From Incubators
The Startup India scheme offers the support of incubators to startups. To enumerate, a business incubator is an organization or entity that helps a business owner build a startup in an early stage. The organizations have good experience in running a business. In like manner, they also possess advanced technical knowledge and expertise. You can get help with technology from incubators if you plan to register yourself under Startup India.
Furthermore, incubators offer startups advisory support, funding access, and co-working spaces. Also, startups get assistance for labs, networking, and linkages from an incubator. Incubators invest in your business and provide you with capital. Additionally, you can take their help for getting professional services and advice from reputed and top lawyers, accountants, and other professionals.
Incubators help startups with mentoring, also. Firstly, they offer the services of professionals and business owners at their incubation centres. Secondly, startups also get networking support from incubators. To enumerate, incubators handhold a startup by providing all types of facilities and support needed for business success.
Types Of Incubators
Startups can seek help from incubators if they need any help. There are many types of incubators. The main types of incubators are as follows.
- Firstly, academic institutions can function as an incubator.
- Secondly, development corporations that work without charging money are incubators. They are non-profit.
- Thirdly, development ventures that demand money are incubators. They work for a profit.
- Next, Venture Capital businesses or companies work as incubators.
- Lastly, the other incubators are organizations and companies that combine the above-listed categories.
Furthermore, incubators can be online or offline. The offline incubators have a physical office or space. To explain, they help business owners network with other businesses in a physical area. On the other hand, online incubators offer their services online and virtually. They don’t provide physical space, but their entire operations are online.
Regulatory Reforms In Startup India
Businesses in India faced profound government apathy before the Startup India scheme was started. Not to mention, the high level of corruption was causing difficulties for business owners. Moreover, bureaucratic hurdles caused delays in getting approval from the higher-ups.
All this changed with the Startup India program. In the first place, the regulatory reforms of the scheme have made life easy for a startup. Many regulatory policies in Startup India, like income tax exemption, offer an incentive to businesses. Furthermore, the procedures and compliances are accessible, so startups have no problems. It has encouraged ease of doing business in India. At present, anyone who wants to start a startup does not need to struggle to get approvals and compliances.
1. Self-Certification
Startup India offers the facility of self-certification. Firstly, entrepreneurs can self-certify their business using an app on their smartphone. Secondly, self-certification is available for nine labour laws. For your information, a startup does not have to undergo inspections for three to five years. However, they may need to face review if someone registers a written complaint against them. Self-certification is also available for some white-category industry sectors for 3 environmental laws. Furthermore, business owners can download self-certification formats for labour laws from the web portal of Startup India.
2. Fast-Tracking Patent Applications
Startup India offers a facility for fast-tracking of patent applications. Usually, a business takes a long time to get approval for IP or Intellectual Property Rights. However, startups can get support for an IP and patent under Startup India much faster.
Success Stories
Let’s look at some examples of startups that have benefitted from the Startup India program. Take inspiration from the success stories of these startups and plan to launch your startup.
1. Ola Cabs
The 2010 company registered itself under Startup India and greatly benefited from it. Admittedly, the startup is doing a great job by providing a facility for ride-hailing to people. Alternatively, it has gained success in other businesses like food delivery. Ola offers services for electric vehicles or EVs. What’s more, the startup is valued at seventy thousand crore rupees.
2. BYJU’S
Byju’s is a well-known ed-tech company that offers online courses for learners. That said, the startup has received funding amounting to 7,500 crores. Furthermore, the net worth of Byju’s is 1,20,000 crores. Additionally, the company has forayed into other areas, like acquiring Whitehat Jr. It has launched learning programs for mathematics and coding.
3. Zomato
It is a food delivery business that was launched in 2008. Zomato does online food delivery to the customer’s location. Firstly, it has been successful in getting funding of fifteen thousand crores. Secondly, the company’s net worth is estimated at 37,500 crore rupees. Alternatively, Zomato has started some membership programs that offer a discount to customers for ordering food from it.
4. Rivigo
This logistics company has received funding of 7,500 crores. To begin with, Rivigo was launched in 2014, and its value is more than 30,000 crores. Not to mention, the relay tracking technology of the startup is very advanced. To enumerate, it helps in decreasing transit time and duration.
Case Studies
1. AgroStar
This agricultural startup has started an application for smartphone users. Firstly, the app helps farmers increase their yield and income. Small farmers mainly use it. Secondly, their app offers services in multiple languages. It is based on Google Cloud technology. Admittedly, the company registered itself under Startup India and gained benefits. It got funds, incentives, and support from the scheme.
2. Ather Energy
Ather Energy is another startup that benefited from the scheme of the Government of India. To explain, the company manufactures and sells electric scooters. The Karnataka-based company was started by Tarun Mehta and Swapnil Jain in 2013. Another critical point is that Ather Energy operates an EV manufacturing factory in Bangalore and Tamil Nadu. Moreover, the startup received funding and other support through Startup India. It made Ather successful in the EV business.
3. Tricog
The company offers virtual medical diagnostic services for heart disease to medical professionals and the healthcare industry. What’s more, its benefits are available in more than 14 countries. Tricog was able to get funding support from Startup India. Admittedly, it helped the medical diagnostic startup in expanding its reach.
Conclusion
We discussed the way the Startup India scheme is giving a boost to entrepreneurship in India. The article helped you learn about some funding schemes and incubators. Next, we also talked about the success stories and case studies of startups that have benefitted from the program. We encourage all aspiring entrepreneurs to consider registering their business under Startup India. Furthermore, taking advantage of the scheme that gives you many incentives and facilities would be best. Lastly, we hope that more and more startups will enrol themselves in Startup India and provide the Indian startup ecosystem a boost.
