Kerala startup ecosystem clocks high growth, says report
Kerala has emerged as one of countryâ€™s top startup destinations marking an impressive compound annual growth of 17 per cent since 2012, taking the total number of ventures based out of the state to 2,200 and displaying high competence in netting funds, says a report compiled by digital media platform Inc 42 in association with TiE Kerala.
In a single year since 2018 alone, the number of startups set up in Kerala marked a steep increase of 35 per cent, says the report, unveiled at the valedictory function of the TiECon Kerala 2019, at Kochi on Saturday.
Dr Subramanian Swamy, MP, released the report titled â€˜Kerala Startup Ecosystem 2019â€™ in the presence of Dr Saji Gopinath, CEO, Kerala Startup Mission (KSUM).
Kerala-based startups kept up their competence in getting funds by raising $89mn till date, and compared to 2018, till September this year startups clocked an 18 per cent uptick in securing funds. In 2019, startups netted $44mn funding spread across 13 deals. As many as 47 startups have raised funds from outside and 13 startups received funds in 2019.
â€œKSUM has designed and executed a set of programmes and schemes as per the revised Kerala Startup Policy (Technology Innovation and Entrepreneurship Policy) to identify and support technology startups in the State. In the last six months alone, KSUM incubated and funded over 200 startups,â€ said Shri M Sivasankar IAS, Secretary, Electronics and IT, Government of Kerala.
â€œMany of the key policy interventions formulated by the Kerala Government to support startups and measures to ensure inclusivity in innovation are now being adopted by other State Governments as well,â€ Shri Sivasankar added.
â€œTo ensure investment opportunities, KSUM has come out with an innovative Fund of Fund scheme to invest in Alternative Investment Funds (AIFs). A combined corpus in excess of Rs 1,000 crore of investment capital has been made available for startups through this scheme by committing less than 10 percent of this amount into various AIFs,â€ said Dr Saji Gopinath, CEO, KSUM.
â€œInvestments worth more than double the deployed amount has already happened into Kerala based startups in the last one year. It is heartening to note that this early stage fund has enabled some startups to grow substantially during last one year,â€ he added.
According to the report, of the 2,200 startups based in Kerala, as much as 13 per cent were registered in the first three quarters of 2019. Ernakulam and Thiruvananthapuram are top choices for startups in setting up their headquarters as about 59 per cent of startups are located in these two cities. Kochi accounts for 36 per cent of them, followed by Thiruvananthapuram with 23 per cent.
â€œIn 2019, the Indian startup ecosystem recorded 553 funding deals, which together crossed the $9 bn funding mark. Interestingly, it is Kerala which has emerged as one of the top startup destinations of the country,â€ says the report.
â€œAround 75 per cent of the Kerala-based startups are product-driven companies and 25 per cent of startups are service-driven. Sector-wise, 28 per cent of startups offer IT and consulting services followed by health tech and edtech with 8 per cent and 7 per cent respectively,â€ it says.
About 41 per cent of the startups have two founders each while 39 per cent startups have single founder. However, only five per cent of the startups have female founders. Moreover, 14 per cent of startups have parity in number of male and female employees.
â€œKerala Government has earmarked investments of over Rs 1,000 Cr in the state startups over the next four years,â€ it adds.