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.

GAIL has created a corpus of ₹ 50 Crores for investment in Start-Ups. 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 has carried out 2 rounds of Solicitation till now and 21 Start-ups have been identified for investment.

This is the 3rd round of our Solicitation and is especially targeted for Start-Ups working in the area of ELECTRIC VEHICLES.

This Solicitation Round is open from October 10, 2018 to October 30, 2018.

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-Up should be working in the area of ELECTRIC VEHICLE.
  2. GAIL will consider Proposals for funding only from those entities that are registered as Start-Up by Department of Industrial Policy & Promotion (DIPP). Presently, the eligibility criteria is
    1. Up to seven years (ten years, in case of Start-Ups in Bio-technology Sector) from the date of its Incorporation/Registration,
    2. If its turnover for any of the financial years has not exceeded ₹ 25 cores, and
    3. It is working towards Innovation, Development, Deployment or Commercialization of new Products, Processes or Services driven by Technology or Intellectual Property
  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.
    Click here to download Declaration

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 personnel 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 projects
  6. Start-up financials
  7. Future road map of Start-Up
  8. Primary risks involved in the project
  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 Agreement before commencement of Funding by GAIL. The draft Clauses of the Agreement shall be provided when the Start-Up is called for discussion with the Committee. These Clauses shall also be finalized during the meeting with the Committee.

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 send a Letter of Acceptance (LOA) to the Start-Up informing GAIL’s decision. The LOA shall have the salient features of the funding viz. Amount, Milestones etc. and an Investment Agreement.

The Funding shall commence after the Start-Up submits the signed copy of LOA as a token of acceptance along with the Agreement.

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