Kerala has been recognised as the ‘top performer’ in developing a strong startup ecosystem for the second consecutive year in the States’ Startup Rankings for 2019 brought out by the Union government’s Department for Promotion of Industry and Internal Trade (DPIIT)
ADVERTISEMENT
The State shared the award with Karnataka while the award for the ‘best performer’ went to Gujarat, Kerala Startup Mission (KSUM) sources said.
In its certificate of appreciation, DPIIT observed that the State government has taken exemplary initiatives in establishing among other things institutional support for women-led startups, including pre-incubation support, special subsidies and seed funding; a robust venture funding mechanism for startups and support from various government departments in the form of hackathons and financial incentives.
It also recognised the State as an institutional leader, a regulatory champion, a procurement leader, an incubation hub, seeding innovation leader and scaling innovations leader. In its report elaborating the criteria based on which the award was given, DPIIT observed that Kerala remains the first and only State to have committed 1% of its annual budget earmarked for entrepreneurial development activities.
ADVERTISEMENT
The recognition for the State was based on seven metrics – institutional support, simplifying regulations, easing public procurement, incubation support, seed funding support, venture funding support, and awareness outreach – in terms of development of a startup ecosystem.
The State drew a score of 63% in terms of institutional support, 50 in simplifying regulations, 48% in easing public procurement, 33% in awareness and outreach and 28% in seed funding support. However scores of 100% and 16% in venture funding support and incubation support on either ends of the spectrum turned out to be surprising.
KSUM sources said that the low score in terms of incubation support concealed more than it revealed in that the thrust was on physical infrastructure developed by the government and government agencies. “
Kerala follows a decentralised incubation support mechanism with the focus on extending incubation support, including in the virtual space, rather than developing physical infrastructure involving huge capital expenditure, sources said.
On the other hand, the ‘Fund-of-Fund’ scheme initiated by KSUM in association with four Securities and Exchange Board of India-registered Alternate Investment Funds (AIFs) – Unicorn India Ventures, Special Invest Fund, Indian Angel Network and Exseed Electron Funding – helped the State’s performance when it came to venture fund support. KSUM has committed ₹59 crore through these four funds.
The DPIIT report observed that the “State has taken key steps to support venture funds by establishing clear guidelines for AIF” highlighting the evaluation criteria, eligibility and the application procedure for applying to such funds.