As of October 3rd, 2023, India boasts 111 unicorns with a combined valuation of $349.67 billion. Through various schemes, the government provides participating startups with enhanced access to customers, international markets, and potential investors. This exposure enables startups to expand their reach and scale their businesses effectively.
The SAMRIDH startup scheme is one such measure. This scheme underscores the government's commitment to fostering innovation and entrepreneurship by providing critical support to 300 startups through mentorship, funding, and other essential resources.
The Ministry of Electronics and Information Technology unveiled the Startup Accelerator of MeitY for Product Innovation, Development & Growth (SAMRIDH) program on August 25th, 2021.
This article discusses the objectives, selection process, fund disbursement, impact, and support it offers to startups in India.
What are the objectives of the SAMRIDH scheme?
Through innovation and entrepreneurship, the program aims to foster inclusive growth and create opportunities for individuals from diverse backgrounds. The objectives of the SAMRIDH scheme include:
1. To provide funding support and fiscal incentives to startups.
2. To address the gap in accessing growth stage funding identified in the Startup India 2018 report.
3. To recognise the pivotal role of enablers such as incubators and accelerators in supporting and accelerating the successful development of businesses within the startup ecosystem.
4. To align with findings from the NASSCOM Strategic Review 2019 report, which highlights the dominance of startups in enterprise software and services sectors like FinTech, EdTech, and HealthTech, collectively comprising nearly 50% of the total startup landscape.
5. To respond to the specific demand for accelerators tailored to support core technologies such as IoT, prevalent in 15-17% of startups, as well as AI (54-58%) and AR/VR (26-28%), across segments like Home Automation, HealthTech, FinTech, RetailTech, Real Estate, and EdTech.
How does the SAMRIDH scheme disburse finances?
Accelerators will design customised programs for each startup in the cohort, addressing their unique needs. They'll provide services like connecting with customers and investors, boosting capacity, and improving products. Each startup will have a budget of Rs. 2 Lakhs, with a maximum of Rs 20 Lakhs per cohort, to support these activities.
Financial model:
Description
Year 1 (Rs. in Cr)
Year 2 (Rs. in Cr)
Year 3 (Rs. in Cr)
Total (Rs. in Cr)
Startup Acceleration Fund
30
30
30
90
Accelerator Services and Activities
2
2
2
6
Administrative Expenses
1
1
1
3
Total Financial Outlay: Rs. 99 Cr
What is the selection process for the SAMRIDH scheme?
The selection process for the SAMRIDH scheme typically involves the following stages:
1. Strategic evaluation based on criteria:
The scheme employs a rigorous evaluation process based on innovation, market potential, scalability, and societal impact. Startups are assessed on their potential for growth and impact for support.
2. Identification of startups for accelerated growth:
The program identifies startups with exceptional promise and potential for rapid growth and scalability in their respective industries. Through a meticulous selection process, SAMRIDH focuses on startups with the highest potential for success.
3. Comprehensive support post-selection:
Once selected, startups receive comprehensive support through mentorship, funding, and other necessary resources. SAMRIDH provides ongoing assistance to participating startups, ensuring they have the guidance and support to navigate the challenges of scaling their businesses.
How does the SAMRIDH scheme support startups?
The SAMRIDH startup scheme fosters a culture of innovation and entrepreneurship by providing critical support to Indian Software Product startups. By nurturing a vibrant ecosystem of innovative ventures, the program aims to drive technological advancement and address critical societal challenges through:
1. Financial assistance:
SAMRIDH provides funding support of up to Rs 40 lakh per startup based on the current valuation and growth stage. This financial assistance enables startups to invest in key areas such as product development, marketing, and talent acquisition, fuelling their growth and expansion. Some may explore options like a business loan for additional financial backing.
2. Accelerated growth programs:
Participating startups gain access to customised acceleration programs designed to accelerate their growth trajectory. These programs offer mentorship, networking opportunities, and tailored support services, equipping startups with the resources and tools to succeed in a competitive market.
3. Investor facilitation:
The SAMRIDH scheme for startups facilitates matching investments by accelerators and investors, amplifying the impact of the support provided. By connecting startups with potential investors, the program aims to unlock additional funding opportunities and support their long-term growth objectives.
What is the impact of the SAMRIDH scheme?
SAMRIDH aligns with India's broader development agenda by promoting innovation, entrepreneurship, and economic growth. By empowering startups to succeed, the program contributes to India's efforts to build a thriving and competitive economy.
1. Supporting startup growth in an evolving ecosystem:
The scheme supports the growth of potential IT-based startups within the dynamic Indian Software Product ecosystem.
2. Addressing government challenges for startups:
By addressing challenges like VC and App Challenges floated by the government, SAMRIDH can facilitate the commercialisation of innovative products and solutions developed by startups.
3. Mitigating COVID-19 impact on startups:
In response to the economic fallout from COVID-19, SAMRIDH aims to provide essential support to tech startups facing revenue decline, operational disruptions, and investor hesitancy.
4. Fostering investor confidence and market resilience:
The scheme can bolster investor confidence and stimulate startup investment through funding support and mentorship, thereby enhancing market resilience and stability.
5. Navigating regulatory changes and foreign investment restrictions:
The SAMRIDH scheme has the potential to assist startups in navigating regulatory complexities and foreign investment restrictions, ensuring compliance and continuity amidst evolving regulatory landscapes.
6. Encouraging innovation and adaptability:
By empowering startups to innovate and adapt to changing market dynamics, the scheme can foster a culture of resilience and innovation within the startup ecosystem.
7. Contributing to economic recovery and growth:
SAMRIDH scheme for startups can contribute to economic recovery by driving investment, job creation, and innovation, fuelling overall economic growth and development.
Final thoughts
SAMRIDH scheme aims to empower startups to thrive in a competitive landscape and drive technological advancement through strategic evaluation and comprehensive assistance. The SAMRIDH scheme is a good option if you're looking for government-funded financial assistance.
However, if you’re considering financial institutions as well, explore Tata Capital. Tata Capital offers MSME loans at competitive interest rates. Scale your business with comfortable loan tenures, quick approvals, and minimal documentation.
14 June 2024
6 mins read
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