Tamil Nadu

Tamil Nadu’s ranking improves in start-up ecosystem, attracts good funding in first six months

Private Equity (PE) and Venture Capital (VC) (PE/VC) firms have invested $508 million across 14 deals during the second quarter of 2022. Of this, nine deals worth $477 million were with firms headquartered in Tamil Nadu, while the remaining five deals worth $31 million were with firms, once headquartered here but have now moved close to potential investors. However, these firms continue to have majority of their operations in Tamil Nadu.

According to data collated by Venture Intelligence, a research service focusing on private company financials, transactions and their valuation, PE/VC firms have been actively investing in Tamil Nadu-based start-ups and for the first six months of this year, they have pumped in $1,813 million across 39 firms. During the same period last year, they invested $862 million in 25 firms.

Angel investments for the first six months of this year has doubled and stood at 34 deals, compared to 16 deals during the same period last year. Tamil Nadu’s ranking in the start-up ecosystem has also improved, according to the State’s Startup Ranking, released by Ministry of Commerce and Industry and Department for Promotion of Industry and Internal Trade. From an emerging ecosystem title in 2018 and 2019, the State is now categorised as a leader State.

Sivarajah Ramanathan, Mission Director and CEO of Tamil Nadu Startup and Innovation Mission (TANSIM), said a lot of data was collated and sent to the centre and that was one main reason why the State fared well in the rankings. “A lot of work has happened in the last one year in Tamil Nadu’s start-up ecosystem and next year, our ranking will go up further,” he added.

In Tamil Nadu, the Industries Department, in collaboration with the American Tamil Entrepreneurs Association (ATEA), has been funding start-ups. ATEA Digital Accelerator Grant worth ₹50 crore was awarded to encourage innovation and automation through technology-based start-ups and 16 start-ups were provided support, with mentorship assistance and five start-ups were provided reimbursement-based grants worth ₹5 crore.

Extending support

The Tamil Nadu government has undertaken initiatives in the disruptive sector to extend its support to start-ups. Tamil Nadu Electric Vehicle Policy, 2019 encourages start-ups in the e-vehicle (EV) sector offering incubation services, in the form of office space, common facilities and mentoring support, to start-ups. An EV Venture Capital Fund has been planned by the government to offer financial support to EV start-ups and enable them to scale up their business.


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Printable version | Jul 6, 2022 12:53:16 am | https://www.thehindu.com/news/national/tamil-nadu/tamil-nadus-ranking-improves-in-start-up-ecosystem-attracts-good-funding-in-first-six-months/article65603905.ece