Tamil Nadu Startup and Innovation Mission (StartupTN) has rolled out the fifth edition of Tamil Nadu Startup Seed Fund (TANSEED 5.0). For the first time, it has said it will pick up a 3% equity in startups that get the funding.
Around 50 startups will be funded in this edition. “TANSEED will be awarded in an equity model for a 3% stake in the startup ventures,” said Sivarajah Ramanathan, Mission Director and Chief Executive Officer of Tamil Nadu Startup and Innovation Mission.
“Since its inception in 2021, around 84 startups have benefited from this scheme. Many beneficiaries of the previous editions of TANSEED have scaled up their ventures and successfully raised venture capital funding from prominent investors and massively expanded,” he said.
On the rationale behind picking up a 3% stake, officials said the government wanted this to become a sustainable model and this would also help in creating funds for investing in more startups, especially social and women-led startups, in the coming years.
Aimed at bridging the gap in the fund requirements of startups during their early stages, the seed fund provides up to ₹15 lakh each to green tech, rural impact and women-led startups and up to ₹10 lakh each to other startups.
Minister for Micro, Small and Medium and Enterprises T.M. Anbarasan had announced that ₹10 crore would be given to 100 startups under TANSEED. In December last, Chief Minister M.K. Stalin announced special packages of assistance for green tech, rural impact and women-led startups. This is being implemented in TANSEED 5.0.
According to details provided by StartupTN, to be eligible for this round of funding, a startup should be headquartered in Tamil Nadu and registered with StartupTN and the Department for Promotion of Industry and Internal Trade under the Union Ministry of Commerce and Industry. It should not have been formed by the splitting or reconstruction of an existing business, or as a subsidiary or joint venture or associate of another company.
The funding is not meant for the Indian subsidiaries of MNCs and foreign companies. A startup seeking funding should not owe any dues to government agencies and should not have been blacklisted by any government agency in India, officials said.
