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Government Backs Bihar’s Startups, As The Enabler Ecosystem Struggles To Make A Mark

Government Backs Bihar’s Startups, As The Enabler Ecosystem Struggles To Make A Mark

Among the major challenges for startups in Bihar is the lack of entrepreneurship enablement at the grassroots level

Without many accelerators, investing organisations, mentors and investors, startups have to come up the hard way in Bihar

The state government has emerged as the major enabler thanks to its startup policy as well as other fiscal initiatives

As with many other states in the country — outside the top five or six — the Bihar startup ecosystem is suffering from a lack of enablers or the ecosystem around startups.

Plagued by the lack of investing organisations, investors and accelerators, startups in the state have to rely on the efforts of the government and the incubator community, which has provided startups with the necessary capital and infrastructure support. Having said that, Inc42’s conversations with the startup ecosystem in Bihar revealed that the state’s enablers are working to expand their reach and fight this gap to strengthen the ecosystem.

“Investments are pretty slow in the state. We have, however, partnered with the Indian Angels Network (IAN) to try and solve that. Even then, angel investors and equity culture is needed to provide funds to the startups for scaling up,” – Sanjay Goenka, former vice president & Secretary, VenturePark Incubator

Bihar Enablers Fight The Dearth Of Resources

With the ultimate goal of helping startups grow, the startup ecosystem enablers in Bihar are trying to provide the startups with the impetus for growth, with fewer resources than are available to them in other states. One of the highlights of the Bihar enabler ecosystem is that the state is home to seven incubators, according to the Startup India website. This is one of the biggest advantages for startups, apart from government benefits.

The lack of accelerators and investing organisations coupled with the dearth of mentors and investors is the major reason for the slower growth of startups in Bihar.


VenturePark- BIA (Bihar Industries Association) Incubator

Located in Patna, this incubator is a joint initiative from BIA and the Indian Angel Network (IAN). Backed by the strength and reach of both these stalwarts in the Indian market, the Venture Park offers access to mentors from the industry as well as the global market. The incubated startups are supported not only through access to the right infrastructure but also by IAN’s global mentor lineup and its pool of angel investors. The incubator also supports startups in market penetration and go-to-market strategy.

Enterprising Zone

Established in 2013 by the Bihar Entrepreneurs Association (BEA), this incubation centre is supported by the central IT ministry, the state’s department of industries, Startup India and other bodies. The incubator not only works with the aim of supporting the growth of the startups but also helps promote entrepreneurial values among students. Apart from partnering with mentors and investors from various sectors, BEA organises workshops and programmes new-age technologies, business development opportunities and other themes. The incubator claims to have worked with over 150 startups and entrepreneurs in four years since its inception.

Coworking Spaces

Work Studio Coworking

Headquartered in Patna, this coworking space has offices in Ranchi, Gurugram and Indore as well. Work Studio claims that it is further planning to expand to other cities such as Ahmedabad, Mumbai, Lucknow, Kolkata and more. Not only does this coworking property offer startups the enablement infrastructure and facilities to make operations smoother it has also tied up with many entities and provides discounted rates and services to its startups. Among its partners are names such as DigitalOcean, Instamojo, Vakilsearch and more.

Government: The Pillar Of Startup Strength In Bihar

Besides these incubators, the Bihar government has been the major support system for startups in the state. As Goenka told Inc42, the Startup Policy of the state pivoted the whole ecosystem of the state towards enabling startups and new innovation.

Revised and implemented in 2017, the five-year policy has the following objectives:

  • To introduce and promote entrepreneurship among the youth through various programmes such as “Udyami Bihar, Samridh Bihar Campaign”, business plan competitions and more
  • Facilitate the development of entrepreneurship development centres and entrepreneurship facilitation centres to increase awareness and promote entrepreneurship
  • Encourage entrepreneurship through education by introducing learning modules in the university/schools, MOOC (massive open online courses) and more
  • To set up new incubators and coworking spaces, while also supporting the expansion of existing ones

There are many other initiatives that were put in place by the state government for the benefit of the startups, both included in the policy and apart from it.

Bihar Startup Fund Trust (BSFT)

Operating as ‘fund of funds’, the government set up this fund with a corpus of INR 500 Cr. The aim of the trust is to nurture startups and help their organic growth and scale and help them create a positive impact in the country. BSFT also acts as the nodal agency ensuring the implementation of the startup policy in the state.

The Samridhi Fund

An INR 430 Cr social venture capital fund, the Samridhi Fund was envisaged and implemented by SIDBI to provide funds to social-impact businesses, which deliver returns, in both financial and socio-economic terms. The focus of the fund is on startups in Bihar, Uttar Pradesh, Madhya Pradesh, Odisha, Chattisgarh, Jharkhand, Rajasthan and West Bengal.

The Seed Fund

The state government has also allocated an interest-free seed grant of up to INR 10 Lakh per startup for a period of 10 years. The grant aims to provide assistance to the startups for validation of the idea, prototype development, market research and initial activities to set up a startup and more. The grant is provided to the startups certified by the nodal agency (BSFT) and should be registered with an incubation centre.

Challenges For The Enablers In Bihar

While many other states also admit that inadequate tech talent is a major challenge in their growth, Bihar has a different set of struggles. With an abundance of skilled talent for tech companies, the state’s startups struggle with the dearth of awareness around innovation and entrepreneurship, and the benefits startups can offer.

Many local enablers told us that the promotion and education of entrepreneurship should be a key focus for the government and other bodies. This is particularly effective among school students and college innovators.

“The state needs to promote entrepreneurship in the initial stages. Development of entrepreneurship right from schools and colleges is very important and is missing from our ecosystem. Adding to that is the lack of exposure for the budding and aspiring entrepreneurs from the state.” – Alok Kumar, co-creator, Work Studio Coworking