Uttar Pradesh has been making significant strides in the startup sector in recent years. The Uttar Pradesh Government has launched various initiatives to foster entrepreneurship, such as the "UP Startup Policy," which provides financial support, mentoring, and plug and play office infrastructure across the state.
The Government has established Innovation Hub at AKTU on the Hub & Spoke Model and has approved 63 Incubators in the state to support young minds and startups to take benefits of the Startup Policy. These Incubation Centers and accelerators have been established, particularly in major cities like Noida, Lucknow, and Kanpur. Institutions like the Indian Institute of Technology (IIT) Kanpur and the Indian Institute of Management (IIM) Lucknow, Dr. APJ Abdul Kalam Technical University, IIT BHU and MNIIT, Prayagraj are also supporting startups through labs, mentorship and resources.
Startups in UP are thriving in sectors like Information Technology, e-Commerce, Agritech, Healthtech, and Fintech. The state's agricultural background has spurred innovations in Agritech solutions. There has been an increase in Angel and Venture Capital interest in the region, with many startups attracting funding from both local and national investors through Funds of Funds established in collaboration with SIDBI. With a large population and several prominent Educational institutions, UP has a growing talent pool, making it an attractive location for the Tech Startups. Overall, Uttar Pradesh is becoming an increasingly vibrant hub for startups, supported by Government Policies, Investment, and a strong talent base.
While we see unicorns active in Tier I cities, this ecosystem is not restricted and is proliferating across the state in all the districts. Traditional sectors such as E-commerce, Fin-tech, E-commerce, Supply Chain & Logistics, Internet Software & Services do dominate the arena but a strong wave of unconventional sectors such as Content, Gaming, Hospitality, Data management & Analytics, etc. are making their place on the list.
4th largest Startup Ecosystem in the country with more than 16,000+ DPIIT recognized Startups
206 startups were approved for Incentive under the Policy, Rs. 5.50 crore has been disbursed. An additional Rs. 1.30 is to be disbursed to 38 more startups.
The State government has recognized 63 incubators across 23 districts of Uttar Pradesh. Rs. 5.53 crore has been disbursed to incubators
UP has been consistently performing as a LEADER in the State Startup Ranking conducted by DPIIT. The State is gunning to be a TOP PERFORMER and subsequently a BEST PERFORMER in the near future.
Rs. 26.67 Lakhs disbursed to 18 Startups from Purvanchal Region. 3 CoEs have been established in the state in the emerging sectors such as AI & ML, Drone, and MedTech. 4 more CoEs are to be established in Blockchain, 5G&6G (Telecom), and Additive Manufacturing.
- To be among top 3 states in the “States’ Startup Ranking” conducted by, GoI
- Establish/support 100 incubators, minimum one in each district of the State
- Develop minimum one million square feet of incubation/acceleration space for startups
- Establish 8 state of the art Center of Excellence (CoEs)
- Establish India’s largest incubator in Lucknow
Grant-in-Aid for CoE
- Covering Capital and Operational Expenditure upto INR 10 Crores to CoE during a span of 5 years from the date of establishment.
Incubator Grants
- Capital Grant to (Private Institutions) upto 50% reimbursement of the eligible amount subject to maximum limit of INR 1 Crore & 1.25 Crores for Bundelkhand & Purvanchal Region for Incubators (Tech Infrastructure Development).
- Financial support to cover Operational Expenditure upto INR 30 Lakhs per Year for 5 Years Total 1.5 Crores or until self-sustainable whichever is earlier for the incubators
- State level annual incubator rankings shall be introduced as per the KPI framework approved by the PMIC. Top3 performers in the ranking to be awarded amount of INR 3 Lakhs, 2 Lakhs and 1 Lakh per year to the winner, first runner up and the second runner up respectively
Incentives for Startups
- Sustenance Allowance: INR 17,500 per month per startup for a period of one-year upto 10 startups per incubator per year at the idea stage.
- Prototype Development: INR 5 Lakhs per startup for assistance in developing the prototype, given in one shot.
- Seed Capital: Upto INR 7.5 Lakhs per startup as marketing assistance upto 10 startups per incubator per year to launch the Minimum Viable Product (MVP) in the market, given in three tranches.
- National Event Participation Incentive of INR 50,000/- and International Event Incentive INR 1,00,000/-, prior approval necessary.
- Patent Filling reimbursement @INR 2 Lakhs for Indian patents and INR 10 Lakhs for International Patent.
Leading sectors inviting funding include FinTech, EdTech, Ecommerce, Social Network, FoodTech, Logistics and Supply Chain, Media and Entertainment, D2C Brands, SaaS, and HealthTech. Additionally, there also has been a shift in the traditional way of funding, wherein startups are now looking at exercising alternate routes such as crowdfunding, revenue-based financing, venture debt, bank loans, etc.
Investors essentially buy a piece of the company with their investment. They are putting down capital, in exchange for equity: a portion of ownership in the startup and rights to its potential future profits. Investors form a partnership with the startups they choose to invest in – if the company turns a profit, investors make returns proportionate to their amount of equity in the startup if the startup fails, the investors lose the money they’ve invested.
Investors realize their return on investment from startups through various means of exit. Ideally, the VC firm and the entrepreneur should discuss the various exit options at the beginning of investment negotiations. A well-performing, high-growth startup that also has excellent management and organizational processes is more likely of being exit-ready earlier than other startups. Venture Capital and Private Equity funds must exit all their investments before the end of the fund’s life.
