Good policies helped Karnataka become India’s startup hub

Dubai - The Indian state has funded about Rs15 million, and 489 startups have benefited by this, official says.

Karnataka has become the startup capital of India because the state government has done “something different” to encourage and fund new ideas, Dr E.V. Raman Reddy, IAS, Additional Chief Secretary, Government of Karnataka, said here on Monday.

Speaking at a panel discussion at the India Pavilion about the state’s rise as the startup hub, the official said Karnataka “is the only state in India” that has started funding startups through a unique programme called Elevate.

“We have funded about Rs15 million, and 489 startups have benefited by this,” he said.

Dr Reddy said that among the start-ups that have received government funding, 30 per cent are run by women entrepreneurs, and more than 35 are away from Bangalore, in the rural areas.

“And we are rated as a top performer in the startup sector in the country. Oxford Economics in a recent study said that in the next 15 years, that is, till 2035, Bangalore will be the fastest growing city in the world. So, this is what Bangalore is. In the global startup ecosystem report also, we are the only Indian state which is ranked in the top 25. We must be doing something different,” said Dr Reddy.

The official said that if innovation is in Karnataka’s DNA, the government has created a suitable ecosystem for startups to thrive. For instance, he said through a New Age Incubation’ scheme, the government is encouraging innovation among engineering colleges in the rural and urban areas.

The panel, moderated by Khaleej Times’ senior reporter Sandhya D’Mello, also saw prominent start-ups from Bengaluru share their success stories.

The event was attended by Dr Ashwath Narayan, Minister of Higher Education, IT, BT, Science and Technology, Government of Karnataka.

Prashanth Prakash, partner, Accel, said Indian startups can look at the UAE as an ‘anchor market’ with its close proximity to South Asia, and other Arab countries like Saudi Arabia and Egypt. “So, we would like to see this as a $10 to $15 trillion opportunity across this region.”

After the wave of e-commerce platforms that India saw in the last decade, Prakash said currently there are huge opportunities in the B2B sector, which will become much larger in the next decade.

“There are many solutions that startups can provide in climate tech and agritech — which are intertwined — and also space tech, due to privatisation of the sector. So, we are now focusing significantly on nurturing startups. We have created research translation that will focus on quantum technologies and space technologies,” said Prakash, who has a long and successful history of investing in Indian tech start-ups.

Sujeet Kumar, co- founder of Udaan, a B2B trade platform that brings manufacturers, traders, retailers, and wholesalers into a single platform, said the structural changes in India like the introduction of GST and ‘one tax for one country’ policy has helped them think about how to address the B2B e-commerce potential. He said: “With the high internet penetration seen in rural India, the consumer and buying behaviour has changed tremendously, and even in rural areas people are acclimatised to online searching through catalogues. And that is when we entered the market,” he said, elaborating on how Udaan disrupted the existing markets. He said defaulters have now become more careful about their reputation as internet offers transparency.

Nikhil Kamath, founder Zerodha, India’s largest trading platform, said: “Being at the right time and right place helped me rise from a school drop-out” to a billionaire who owns India’s biggest stock brokerage company in terms of volume today.

Speaking to Khaleej Times on the sidelines of the seminar, Dr Aman Puri, India’s Consul General to the UAE, said in the last decade, India created 36 Unicorns and 2021 will see another 36 unicorns. “So, that is the pace of transformation happening in India. Unicorns are becoming the new identity of India.”

He said some of the India start-ups will be coming out with solutions that will benefit not just the country, but the whole world.

He said UAE has committed to a $75 billion in investments to India and he hoped that family businesses in the UAE will look at Bengaluru in a big way.

• India