The Kerala government is looking to create a fund of funds for startups. The government is also planning to invite investors to back young companies based in the state. Saji Gopinath, Chief Executive of the Kerala Startup Mission (KSUM), confirmed the same, stating that the government was looking to create a corpus of about $78 Mn (INR 500 Cr) for Kerala-based startups over the next three years.
He said, “Kerala doesn’t have large angel funds or established angel networks, so we are attracting early stage funds to invest in startups in the state.“ Gopinath further added, “While the government doesn’t have the expertise to invest in startups, it is a good idea to invest through (Alternative Investment Fund, or AIF) category early-stage funds.”
Kerala – Early Adopter Of Startups
Kerala has been one of the early adopters of the Indian startup ecosystem. The Kerala Startup Mission, formerly known as ‘Technopark Technology Business Incubator’, was set up in 2006. It has been actively initiating various programmes for developing the student entrepreneurship in the state. The Kerala Technology Startup Policy was introduced in 2014.
Kerala currently houses startups like Good Methods Global, robotics startup Sastra Robotics, ReelMonk, etc. Last month in a recent e-governance push, the government notified state departments to approach startups for developing mobile apps to be used in their official projects.
KSUM – Leading Innovation Through Startups
KSUM is the implementing agency of Government of Kerala for entrepreneurship development and incubation activities in the state. KSUM was formerly known as the Technopark Technology Business Incubator (T-TBI), a society under the Travancore Cochin literary, Scientific and charitable Societies Registration Act XII of 1955 and started the incubation programme in the name of Technopark Business Incubation Centre (TBIC) in 2002. In 2012, Kerala Startup Mission was taken up by Govt. of Kerala and entrusted as the agency for implementing the entrepreneurship development programmes in the state.
Earlier in July 2017, the state government announced 12 startup projects under the State Poverty Eradication Mission’s Kudumbashree programme. As per reports, the projects will be part of the Startup Village Entrepreneurship Programme (SVEP) by the Union Ministry of Rural Development.
Fund Of Funds For Kerala Startups
With this recent decision to have a fund of funds, the Venture capital funds supported by KSUM will have to invest in Kerala-based startups. However, the amount of investment has to be double the proportion of the funds committed by the state government. KSUM currently has more than 750 startups under its wings.
For setting up the Fund KSUM has invested $1.55 Mn (INR 10 Cr) in Unicorn India Ventures’ $15.5 Mn (INR 100 Cr) fund. It has also signed a pact with Bengaluru-based SEA Fund to invest in the startups housed in the state.
Talking about the startup ecosystem in the state, Anil Joshi, partner at Unicorn India Ventures said, “Kerala has one of the best infrastructure with respect to startups. In the past five years, a lot of developments have happened at the ground level in terms of government support, connecting startups to private companies, and infrastructure and incubation facilities.”
In June, Kerala’s IT Secretary M Sivasankar proposed to set up a government-partnered funding system for startups. In the light of these developments, the setting up of a dedicated funds of funds by the Kerala government, under the guidance of KSUM will definitely provide financial assistance and an impetus to the startup ecosystem in the state.
(The development was reported by ET)