Inside Tamil Nadu’s Vision To Become A Global Startup Hub

The Indian startup ecosystem has come a long way in the last 15 years . Today, it stands on par with the global startup superpowers like the US and China. 

A testament to this is India’s rise as the world’s third-largest startup economy, raising over $160 Bn in just a decade — a feat achieved by only a handful of countries in such a short time.

While cities like Bengaluru, Mumbai and Delhi NCR have remained at the forefront of the country’s startup innovation, wooing investors from all over the globe, there are regions that are silently contributing and are the next powerhouses in the making.  

Here, the state of Tamil Nadu deserves a mention. From being named a capacity-building pioneer and a funding leader to a sustainability promoter, incubation hub, and mentorship champion, Tamil Nadu has earned several titles over the years. 

Tamil Nadu Startup and Innovation Mission, functioning under the MSME department, was recognised by the Government of India as the best in building a startup ecosystem, while Chennai made its mark in Startup Genome’s Global Startup Ecosystem Report 2023, ranking 18th in Asia. 

Not to mention, these laurels rest on years of groundwork.

In 2021, the state had just 2,032 registered startups. Four years later, the count has increased five fold to over 12,050+startups. In a country where women entrepreneurs are few and far between, half of Tamil Nadu’s startups are led by women. 

At the heart of this surge is the Tamil Nadu Startup and Innovation Mission (TANSIM or StartupTN). Started in 2021, the government initiative helps foster ideas into functioning ventures and then into sustainable businesses.

Over the past four years, StartupTN has rolled out schemes and programmes across the state, covering the entire universe of startups — from startup education, funding access, and incubation support to providing help in finding go-to markets, scaling up and competing on the global stage.

A key part of this push is the Tamil Nadu Startup Seed Fund (TANSEED). Under TANSEED, early stage startups receive INR 10 Lakh in seed capital, while women-led ventures, GreenTech startups, and those working on rural livelihoods receive INR 15 Lakh. 

According to StartupTN, the state government has so far allocated about INR 40 Cr under the TANSEED scheme. Startups supported through the programme have collectively gone on to raise INR 535 Cr in external funding.

Buyofuel, Ippopay, Gallabox, Dream Aerospace, Torus Robotics, Plugzmart and Greenpod are among the prominent names that have secured early stage funding from TANSEED.

Another reason behind the rise in startup registrations has been the initiative’s ability to cut registration costs in the state by nearly 80%. The government has also issued more than 8,000 Smart Cards and Start Step Cards to startups and aspirants, giving them access to subsidised products and services. 

By lowering expenses on essentials like legal, marketing, finance and HR, StartupTN Smart Cards help young companies operate more efficiently and focus on growth.

“For many startups, the first hurdles are funding, mentorship, and access to markets. Through initiatives like StartupTN and our regional incubators network, we ensure that entrepreneurs don’t have to walk this path alone,” said mission director and CEO, StartupTN, Sivarajah Ramanathan

From building a wide network of incubators across the state to launching sector-specific funds, Tamil Nadu has been laying one brick at a time in its long-term ambition to break into the ranks of the world’s top 20 startup destinations by 2032.

As a result, innovation is no longer restricted to the capital city, Chennai. Regions like Villupuram, Tiruchi, Thanjavur, Tirunelveli, Coimbatore, Erode, Salem, Madurai and Hosur have begun to punch above their weight, rising as thriving centres of innovation while supporting neighbouring districts through incubation infrastructure.

What’s At The Heart Of Innovation?

The Tamil Nadu Startup and Innovation Policy (2023), which aims to align entrepreneurial growth with the state government’s larger target of achieving a $1 Tn economy by 2030, forms the foundation of StartupTN’s initiatives.

Beyond numbers and scale, Tamil Nadu places inclusivity at the core of its efforts. This ensures that support reaches the last mile, including the startups that are often left out of the mainstream conversation.

A key example is Thozhili, a series of women-exclusive startup boot camps that are designed to support aspiring women entrepreneurs. Since 2021, these camps have brought training and exposure to hundreds of women entrepreneurs.

For marginalised communities, the Tamil Nadu SC/ST Fund is another measure to broaden participation of all classes in the entrepreneurial space. As per the StartupTN data, more than INR Rs 60.80 Cr has already been disbursed to 40+ startups, including OrbitAid, Unibose and TAMS Tribal Green Fuel. 

Similarly, the state’s Periyar Social Justice Venture Lab offers advisory, coaching and acceleration programmes for social enterprises, climate-focussed startups and SC/ST founders.

To help these local startups connect with markets abroad, StartupTN has set up a Global Coordination Centre (GCC) in Dubai. Similar facilities in the US and Singapore are on the anvil.

“Democratisation of entrepreneurship – irrespective of social identity, Geographical origin, financial status and educational background has been at the heart of StartupTN’s mission. Be it empowering women, supporting SC/ST founders, differently abled and transgender founders and rural youths with dedicated funds or taking Tamil Nadu startups global through coordination centres abroad, StartupTN has done what needs to be done,” said Ramanathan. 

“Our regional hubs are playing a vital role in democratising the startup culture, taking it to every corner of the state. Our goal is to ensure no entrepreneur is left behind in this journey,” explained Ramanathan.

StartupTN is now looking towards portraying Tamil Nadu as ‘The Next’ in the space of entrepreneurship, innovation, and the startup ecosystem through a series of its latest video campaigns. The Next captures the state’s ambition to lead India’s entrepreneurial journey — becoming the next hub for the startup ecosystem and StartupTN is methodically creating infrastructure, policies, and funding networks that position the state to lead India’s next wave of entrepreneurial growth.

In the coming years, the government is planning to introduce the Tamil Nadu Technology Transfer Centre (TNTTC), which is expected to play a key role in bridging the long-standing gap between academic research and industry application. 

By facilitating the commercialisation of technologies from universities and research institutes, TNTTC is expected to give startups access to validated innovations they can adapt for real-world use. 

Tamil Nadu On The Global Startup Podium

The state ranks among the highest in India for per capita income and is the country’s second-largest contributor to national GDP. Beyond its economic weight, the state has also emerged as one of India’s fastest-growing startup hubs. 

The value of the state’s startup ecosystem climbed steeply, from $3 Bn in 2021 to $27.4 Bn in 2024. The startup innovation in the region has been facilitated by the Atal Innovation Mission (AIM) of NITI Aayog, as it recognises Tamil Nadu both for its strength in incubators and as a model state for fostering innovation. 

Having long held its ground in manufacturing, Tamil Nadu is now eyeing a place for itself on the global startup map.