TN Budget: INR 75 Cr Startup Hub To Be Set Up In Chennai

Tamil Nadu Finance Minister Palanivel Thiyaga Rajan has allotted about INR 50 Cr to the Emerging Sector Seed Fund to make equity investments in the state-based startups and also leverage capital from institutional investors.

The state government would set up an i-Tamil Nadu Technology hub at the cost of ₹54.61 Cr in Chennai and the central government would coordinate efforts to use technology to solve complex challenges in the state, Rajan said in the State Legislative Assembly.

The minister also announced that Tamil Nadu Industrial Development Corporation (TIDCO) would establish an iconic State Startup Hub in Chennai at the cost of INR 75 Cr, as per a report by TNIE. 

“It is a challenge for startups to source funds, especially to design and build prototypes. Besides getting seed funds to build prototypes, it is crucial for startups to be nurtured in the right ecosystem. I laud the decision of the state government to allocate INR 50 Cr to the Emerging Sector Seed Fund,” said Gobinath P, cofounder and chief operations officer of Modulus Housing, a Chennai-based construction tech startup.

The state finance minister also made announcements to support SC and ST entrepreneurs. He said, “In order to encourage entrepreneurs from SC and ST communities, 5% of all divisible procurement by government and governmental agencies shall be reserved for products manufactured by Tamil Nadu-based SC and ST entrepreneurs.” 

The state government would also establish regional hubs to create a conducive startup ecosystem in Tamil Nadu. Welcoming the decision, IIT Madras professor and entrepreneur Thillai Rajan, said, “Majority of the startup-related activities are concentrated in Chennai, and regional hubs will provide necessary support, guidance and motivation to entrepreneurs in these regions. Along with financial assistance, leadership and direction are essential for growth of the startup sector.” 

District National Informatics Centre’s technical director, Arumuga Nainar said, the decision to have a regional startup hub in Tirunelveli would help the existing initiatives taken in the district  to encourage entrepreneurship and would encourage students to venture into entrepreneurship. 

Earlier in February this year, Tamil Nadu Startup and Innovation Mission (TANSIM) launched the third edition of TANSEED to support early-stage startups based in the state with seed money.

Under the TANSEED (Tamil Nadu Startup Seed Grant Fund) scheme, eligible startups will be identified by an eminent jury and be given a grant funding support of INR 10 Lakh. The grant will primarily help the operational needs of startups during their early stages and help ease their financial pressures. Mentorship by experts and incubation support is also offered.

Prominent Startups In Tamil Nadu 

Chennai is known as the SaaS capital of the Indian startup ecosystem because of the successful entrepreneurs such as Zoho’s Sridhar Vembu, Freshworks’ Girish Mathrubootham, Kissflow’s Suresh Sambandam, Uniphore’s Vinod Muthukrishnan, and Chargebee’s Krish Subramanian among others. However, there’s also another set of logistics, agritech and deep tech startups that have made their mark in the Tamil Nadu startup ecosystem. Some prominent startups from Tamil Nadu are: 

Zoho

Founded in 1996 by Vembu and Tony Thomas, Zoho was initially known as AdventNet INC. The SaaS giant has more than 60 Mn customers and over 9K employees globally. Zoho has more than 50 integrated online applications that support multiple business operations spanning sales and marketing, finance, email and collaboration, app creator and analytics among others. 

Chargebee

The startup was founded in 2011 by Krish Subramanian, Rajaraman Santhanam, Saravanan KP and Thiyagarajan T. Chargebee is a revenue management platform that automates revenue operations of over 4,000 high-growth subscription-based businesses.

CredAvenue

Fintech startup CredAvenue is the new entrant to the unicorn club after raising around $135 Mn in its Series B funding round in March this year. Founded by Gaurav Kumar in 2017, CredAvenue is a debt platform that connects enterprises with lenders and investors. The startup is not an NBFC. 

Freshworks

Founded in 2010 by Girish Mathrubootham and Shan Krishnasamy, Freshworks offers a suite of softwares for customer management. This includes an AI-powered chatbot and messaging platform for customer support, as well as call centre-based solutions for customer service. resolutions.

BankBazaar

BankBazaar is a fintech marketplace founded by Adhil Shetty, Arjun Shetty, and Rati Shetty in 2008. The startup hosts a wide range of financial products from most Indian public sector and private banks, NBFCs, and insurance companies.

OrangeScape  

Founded by Suresh Sambandam in 2003, OrangeScape is a SaaS-based enterprise-level workflow and business process automation platform. OrangeScape’s flagship product Kissflow claims to have over 10K users across 160 countries.

WayCool 

Founded in July 2015 by Karthik Jayaraman and Sanjay Dasari, WayCool is an omnichannel fresh produce distribution company. It distributes farm-sourced fruits, vegetables and other products to local shops and modern retail outlets. The startup claims to process the distribution of 250 tonnes of produce, staples and dairy products every day across its distribution channels to more than 8K clients.

FR8 

Founded in 2016 by Vasanth Immanuel and Jayendran Panneerselvam, FR8 is a technology-driven logistics service provider, offering long-haul trucking solutions to large corporates, SMEs, and the agribusiness ecosystem. It also operates as an online marketplace helping consumers move truckloads between cities.