Start-up in GAIL

Start-Up India’ is a flagship initiative of the Government of India. It intends to build a strong eco-system for nurturing Innovation and Start-Ups in the Country, to derive sustainable economic growth and generate employment opportunities. Government policies are also encouraging Start-Ups by providing fiscal incentives.

GAIL intends to take-up investment in Start-Ups to give a boost to the Government’s efforts and also to derive long-term benefits.

Our Mission for Start-Up Initiative is to Identify, Invest and Nurture Start-Ups that can become successful companies in the long run and provide profitable returns from this diversification.

GAIL had launched its ambitious Start-Up initiative ‘Pankh’ in July’ 2017 to invest in promising Start-ups. GAIL has made investments in 28 Start-Ups operating in various Areas.

GAIL plans to invest in Start-Ups operating in the focus areas. A new Round has been opened by GAIL for Solicitation of Investment Proposals from Start-Ups operating specifically in the Focus Areas, which mainly includes natural gas, petrochemicals ,energy, project management, bio-manure marketing, Nano materials, IoT, data mining, environment, health and social . The Start-Ups that are interested in equity investment from GAIL can apply on our website gailonline.com. GAIL’s equity investment will be limited to 20% of the total equity of the Start-Up

Proposals are now solicited from Start-Ups operating in the Focus Areas.

GAIL would look at the following criteria while evaluating the Investment Proposals of Start-Ups:

  1. Experience of Founders in focus areas or its related business
  2. Stage of Start-Up
  3. Brief Synopsis of Proposal & Product / Services to be offered and targeted Customers
  4. Details of existing business / infrastructure
  5. Plans for business scale-up
  6. Funding from Incubation Centre, if any
  7. Current Valuation of the Company
  8. Details on Innovative / Unique features/propositions
  9. Market Size of Business
  10. Details of technical feasibility
  11. Details of business feasibility
  12. Details of risk anticipated for the proposed proposal
  13. Estimated project cost
  14. Investment amount sought from GAIL and the % Equity stake offered to GAIL

This Solicitation Round is open from 30th March 2021 to 30th June 2021

Selection Process for funding Start-Ups :

Selection of Start-Up Proposal shall be a 4-Stage Process:

  1. Eligibility Screening
  2. Shortlisting
  3. Evaluation
  4. Approval
  1. The Start-Ups should be operating in any of the Focus Areas as mentioned in web portal under Tab’ Focus Areas’
  2. GAIL will consider Proposals for funding only from those entities that are registered as Start-Up by Department for Promotion of Industrial and Internal Trade (DPIIT) previously named as DIPP. Presently, the eligibility criteria is
    1. Up-to a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India.
    2. Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore (100) rupees.
    3. Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
  3. Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a 'Start-Up'. A proprietorship or a public limited company is not eligible as Start-Up.
  4. In addition, the following Eligibility Criteria should also be met: The Start-Up should not have been black-listed by any Government entity or any Incubation Centre. The Promoter(s) shall not have any criminal case pending in any Court of Law in India. A Declaration to this effect shall be required to be submitted in this respect.

The following Criteria is proposed to be used for Shortlisting of Start-Up proposals:

  1. Technical Feasibility
  2. Scalability
  3. Key Team Member's Profile
  4. Founder's Background
  5. Risks involved and Mitigation Plans
  6. Financial Returns
  7. Market Size and Growth Rate
  8. Patentability

GAIL shall evaluate the top rated shortlisted Proposals through a specially formed Committee for the purpose. The said Committee shall also have outside experts with the necessary domain expertise.

The Committee shall discuss the Proposals with the Start-Ups for carrying out the evaluation. The Committee shall use the following broad criteria for evaluation:

  1. Does the idea bring a unique proposition
  2. Target market identification
  3. Founder and Team
  4. Marketing and Distribution
  5. Significant competitors in similar business
  6. Start-Up financials
  7. Future road map of Start-Up
  8. Primary risks involved in the business
  9. Plan for use of GAIL's funds
  10. Exit scenario from the Start-Up

The Committee will also discuss the milestones, payment terms, financing options etc. Thereafter the Committee shall submit its recommendations to GAIL.

The Start-Up shall be required to sign an Investment Agreement before commencement of Funding by GAIL.

GAIL shall carry out Valuation of the Start-Up entity through a third party at GAIL’s cost before making investments.

Subsequent to approval, GAIL shall sign an Investment Agreement with the Start-Up. The Investment Agreement shall have the salient features of the funding viz. Amount, Milestones etc.

The Funding shall commence after the signing of Investment Agreement and submission of Demand letter by the Start-Up.

Note:- GAIL shall keep the Information submitted by Start-Ups as strictly confidential.