STPI Falls Short of Startup Funding Goals, Director General Calls for Review
New Delhi, March 21, 2025 – The Software Technology Parks of India (STPI) has failed to meet its target of funding 300 startups under a central government initiative, said STPI Director General Arvind Kumar recently. The announcement prompted a call for a comprehensive review of the agency’s performance.
Speaking at the STPI’s Sangam event, Kumar acknowledged the shortfall in the Next Generation Incubation Scheme (NGIS), highlighting the need to analyze the obstacles encountered during its implementation. This scheme offers financial aid to technology startups.
“For me, it is more of a report card, ” Kumar stated, assessing the program’s progress. “The scheme was started five years back, but for two years actually, nothing happened except finding some fund manager. In these two and a half years, we were able to support around 685 startups and to 136, we were able to give seed funds. If I have to write my performance report, I think we are not able to do what we could have done. We had a target of 300. We achieved only 100. It is just 33 passing mark.”
The NGIS was launched with a budget of Rs 95.03 crore to incubate 300 tech startups with the help of 12 specialized incubators located in smaller cities.
STPI has provided approximately Rs 35 crore to 136 startups, receiving equity in the range of 1-3 percent in return, the DG stated. Kumar posed key questions around the program’s efficacy.
“We have to see where we failed actually. Why were we not able to give (fund), or there was a lacuna in the scheme or in our mentoring, in our funding scheme or fund manager or our officers or outreach to the colleges. I don’t know. This forum (Sangam) for a full day is not just for celebration. It is for analysing, taking an honest look at ourselves why we were not able to achieve the target of 300 start-ups.” Kumar also encouraged participants to contribute suggestions for adjusting the program or its methods to reach the ultimate goal.
At the event, S Krishnan, Secretary of the Ministry of Electronics and IT, highlighted the impact of startups in the field of artificial intelligence.
“It worries me and concerns me sometimes that we are not able to find enough new startups to actually populate the various centres, incubation centres and accelerators that we have established. It is a struggle. The incubators and accelerators are constantly attempting to find newer startups that they can actually incubate,” Krishnan said. He noted the challenges in sourcing new startups could stem from a lack of risk-takers at the university level or an overabundance of incubators chasing too few promising ventures.
Krishnan also emphasized the unique role STPI has adopted in demonstrating an entrepreneurial spirit to startups and venture capitalists.
“I think a lot more institutions need to come together so that you pool resources. Mentors are difficult to come especially if you are looking at tier-2 and 3 cities,” he said.
Source: PTI
