The SAMRIDH scheme is formulated to develop the Startup Accelerator ecosystem in India. Under this scheme, existing and upcoming Accelerators will be supported and tasked with accelerating and scalingIT based startups that are developing and deploying impactful solutions, creating employment, and generating societal and economic returns. The scheme has two components of funding, namely, provision for administrative cost provided to Accelerators for providing acceleration services to startups and matching equity seed funding provided to startups for scaling their business.The indicative list of acceleration services to be provided to startups are listed in section (“Accelerator Services”).
The SAMRIDH scheme will support existing and upcoming Accelerators to select and accelerate IT-based startups to scale. Among others, the program will focus on accelerating the startups by providing customer connect, investor connect, international expansion, and overall business growth in terms of revenue, users, and valuation parameters.
2. Implementing Agency
It is proposed that MeitY Startup Hub (MSH) shall act as the implementing agency for SAMRIDH. MSH will take equity in Start-Ups for Government’s contribution via Promissory/SAFE Note, same as accelerator.
3. Accelerator Services & Activities
Accelerators shall be tasked with developing customized acceleration programs to fit the needs of each startup in the cohort and provide services ranging from customer connect, investor connect, capacity enhancement, product enhancement, user acquisition, revenue growth, product portfolio extension, etc for which they shall be provided a budget of ₹2.0 Lakh per startup to a maximum of ₹20 Lakh per cohort. In each of the cohorts organized by the shortlisted accelerator, a maximum of 10 startups and a minimum of 5 startups can be supported under the scheme working in the domain area of software products.
Start-ups: The definition of startup will be as per Gazette Notification No. G.S.R. 364(E) dated April 11, 2018 notified by Department for Promotion of Industry and Internal Trade (DPIIT) or amended from time to time by administrative department.
3.1 Deliverables from Accelerators
The DPIIT recognized startups selected by accelerators under the scheme will be provided with the following support from accelerators:
· Market Related Research and Market / Customer Access: Expert diagnostics to understand user requirements, appropriate customer base and product scale to find the right product positioning.
· Technology &Business Mentors: Sector specific experts to guide the entrepreneurs in product development and business development phases of the startup journey to enable the startup to grow its business
· Partnerships and Collaborations: provide access to partnerships with corporates and other entities, both domestic and internationally, which can enable strong value creation for the startups via integration in the business value chain with vendors, investors, customers, service providers, etc.
· Legal Assistance: provide support in terms of legal matters of corporate compliance and statutory requirements and other matters.
· Connected Learning and Networking through shared SAMRIDH/MSH platform.
· Investment from VCs and Angels: Selected startups will get a chance to present their company before a panel of VCs and Angel Investors to receive funding.
· Investment from Government: Up to ₹40 Lakh per startup (with an average of ₹ 30 Lakh per startup per cohort)
· Access to infrastructure and equipment: Accelerators have to provide the startups in the cohort with physical and virtual facilities for working, meeting, and also necessary lab equipment that a startup needs for its product can be provided by the accelerator for the enablement of startup
4. Proposed Duration
Each Accelerator cohort (8-10 Start-Ups per cohort) will have a timeline of 6 months to 12 months.
5. Accelerator Cohort Outcome
The following are expected outcome from selected accelerators for nurturing IT-based startups to scale:
Accelerator Cohort Outputs
1st Year from cohort initiation date
At least 50% valuation growth of entire portfolio of
2nd Year from cohort initiation date
At least 100% valuation growth of entire cohort
6. Investment Model
· Commit an investment of up to ₹40 Lakh to the startup (with an average of ₹30 Lakh per startup per cohort) based on the growth stage of the Start-Up.
· Equal matching investment by the accelerator / investor is required for the startup to avail the funding from the government contribution with a maximum of ₹40 Lakh per startup.
· Accelerators are encouraged to utilize the investment vehicle which is most conducive to the startup for its growth, such investment vehicle can include SAFE/Promissory Note, “CCPS” equity, or any other instrument. The selection of the investment instrument should be based on the combined diligence and discussions and as deemed appropriate by startup, investor and accelerator
· For the Government funding in the start-up, Meity Startup Hub, the proposed implementing agency of SAMRIDH will utilize the same investment vehicle as the accelerator/investor
· The accelerator will not be allowed to take any equity for services provided under the scheme and value addition so achieved due to such services, as scheme provisions financial support to the accelerator.
The entity (accelerator/incubator) must be Section 8 Company (registered as a Non-Profit Organization in India)
6.1 Accelerator Qualification
1. Having targeted accelerator programs with an experience of running at least 3 cohorts with activities listed as desirable under SAMRIDH
Have been in the business of incubation for more than 3 years and supported more than 50 start-ups of which at least 10 have received non-public investment.
2. Have operations in India
3. Have necessary space and infrastructure to carry out activities for the start-ups.
4. Should demonstrate capabilities with regard to:
a. Supporting Start-Ups for domestic and international market immersion.
b. Network/Connect with Venture Capitalist/Angel Investors.
c. On-boarded with leading business mentors.
d. Structured cohort for accelerating deep tech software product start-ups.
Selection: The selection of accelerators to be part of this scheme will be prioritized based on the highest value they provide to the startup in terms of the equity desired and the services delivered.
Accelerators will respond to the Expression of Interest (EoI) by submitting their proposal addressing the eligibility requirements as stated in the EoI. Selection of accelerators will be done by an expert committee comprising representatives from Government, Industry, and Investors. Accelerators with prior experience of running cohorts shall be prioritized over other incubators applying for SAMRIDH scheme.