Although the ‘funding winter’ has slowed down venture capital activities, Karnataka has emerged as the first State in India to provide grant-in-aid to start-ups without taking equity in return, according to Priyank Kharge, Minister for Information Technology and Biotechnology, Rural Development and Panchayat Raj.
The State Government offered funding of around ₹200 crore to support 874 start-ups since the commencement of the Elevate Scheme, an initiative by the Department of Electronics, IT, BT and Science & Technology.
“In the last four years, the State has offered around ₹200 crore to 874 start-ups that operate across various business domains. No State government has done this. In fact, we have done better than private venture capital firms, especially when the funding industry is still talking about a funding winter,” the Minister said in Bengaluru on November 18.
Priyank Kharge, Minister for Information Technology and Biotechnology, Rural Development and Panchayat Raj, briefing mediapersons in Bengaluru on November 18, 2023.
Start-ups located in Tier 2 and Tier 3 cities
According to the Minister, through the Elevate Scheme, the State has created a platform for start-ups even in Tier 2 and Tier 3 cities. “Interestingly, 24% of fund recipients are from Tier 2 & Tier 3 cities, and 30% are women entrepreneurs.”
The government also initiated special programmes to equip Kalyana Karnataka by enhancing the start-up ecosystem in the region to compete with larger markets. Around 25 start-ups from Kalaburagi, Bidar, Raichur, Yadgir, Koppal, Ballari, and Vijayanagar districts have benefitted under the Elevate Kalyan Karnataka initiative.
Elevate Unnati scheme
Ninety-one start-ups were funded Under Elevate Unnati, a social inclusion programme started by the Social Welfare Department to promote startups by the SC/SC community.
The evaluation and selection process for this year’s Elevate winners has already begun.
Every year, around 100 start-ups would be selected with a commitment to grant ₹20 crore from the government, the Minister said.
Job creation outside Bengaluru
“We want to handhold the start-up ecosystem, and we are keen to support start-ups in Tier 2 & Tier 3 cities and in rural areas across the State. All these startups have cumulatively created thousands of jobs in the State. We want this process to continue with more vigour,” the Minister said.
