Seed Fund Scheme - Kerala Startup Mission

• DPIIT-recognised Kerala startups at product or revenue stage seeking seed funding.

About this scheme

The Government of Kerala introduced the Seed Support Scheme to provide crucial financial assistance to early-stage startups, fostering their growth into innovative, technology-driven businesses. This scheme, managed by the Kerala Startup Mission (KSUM), aims to promote new ventures, create jobs, and attract private investment, contributing significantly to the state's economic development. KSUM, as a state government entity, plays a pivotal role in nurturing a thriving startup ecosystem within Kerala, offering various programs and infrastructure support for emerging businesses.

Under this scheme, eligible startups can receive seed funding up to Rs. 15 lakhs. This financial aid is provided as a soft loan against purchase orders, with an interest rate of 6% simple interest per annum, making it an accessible option for nascent ventures. The funds are carefully disbursed in tranches, with an initial release followed by subsequent installments upon submission of detailed progress reports and utilization certificates, ensuring accountability and alignment with project milestones. A generous 12-month moratorium is available before repayment begins in 36 convenient monthly installments, offering startups critical breathing room during their most vulnerable growth phase. Prepayment is permitted without penalty, providing flexibility to successful ventures.

The seed fund is specifically intended to support critical growth activities essential for bringing innovative products to market. These include intense product development, crucial customer development initiatives to validate market fit, targeted marketing efforts, and strategic scaling up of operations. Funds can also cover essential expenses for rigorous testing and trials, engaging professional consultancy for specialized expertise, and addressing intellectual property rights (IPR) issues to secure innovations. Manpower costs for day-to-day operations are also eligible, ensuring startups can maintain essential functions and retain talent during their early, resource-intensive development period.

Beyond monetary support, the scheme offers indirect yet invaluable benefits. KSUM's central role in the state's startup ecosystem means that applicants engage with experienced representatives and expert committees throughout the evaluation and funding process. This engagement provides potential access to valuable insights, strategic guidance, and mentorship that extends beyond the financial transaction. The program's unwavering focus on innovative products is designed to cultivate a high-tech startup landscape in Kerala, positioning the state as a hub for technological advancement and entrepreneurial success.

Who can apply

• The startup must be registered in Kerala as an LLP or Private Limited Company. This ensures the program directly benefits the state's economy and integrates the startup into the local regulatory framework.
• The startup must have an active KSUM Unique ID, signifying active participation in the state's startup ecosystem and engagement with KSUM's support initiatives.
• The startup company must have DIPP registration and an 'Active'/'Active Compliant' status with MCA. This confirms the startup's legitimacy and compliance with national startup policies, crucial for accessing government support.
• The startup must be working on an innovative product or technology. The scheme is specifically designed to foster technological advancements and new solutions, rather than incremental improvements or traditional services.
• The scheme prioritizes product/technology startups and typically excludes service startups and SMEs in trade and commerce. This clear focus ensures funds are directed towards ventures with high growth potential and innovation.
• The startup shall not have any other pending dues with any Government agencies, KSUM, or other incubators in the state, ensuring financial good standing.
• The startup shall not be blacklisted by any Government agency in India, confirming a clean track record.
• Startup directors should have a CIBIL Score preferably more than 750, as this is a loan program and a good credit score reflects financial responsibility and repayment capability.
• The startup should generally be at the prototype/MVP stage, indicating that the product has moved beyond the ideation phase and has a tangible, testable version.

Eligible entity types: LLP, Private Limited

Benefits & funding

• Seed funding up to Rs.
• 15 lakhs as a 6% soft loan, with a 12-month moratorium.
• Funds support product/customer development, marketing, scaling, testing, consultancy, IPR, and manpower.
• Benefits also include potential access to insights, strategic guidance, and mentorship through KSUM representatives and expert committees.

How the application process works

The journey below is informational, compiled from the official program guidelines. Applications are submitted directly with Kerala Startup Mission, in your own name.

1. 1

   Applicants submit an online form, followed by an initial evaluation call and pitch with KSUM representatives.

2. 2

   A final, in-depth pitch is then made to the Seed Expert Committee for rigorous evaluation and shortlisting.

Documents checklist 6

• Seed Application Form
• Business Profile
• Seed Proposal
• Final Pitch Presentation
• Fund Utilization Plan
• Project Plan with Milestones and Timeframe

Need help getting these in order? IncorpX provides assistance for incorporation, DPIIT recognition, MSME and GST registrations along with document preparation.

Frequently asked questions