KERALA - Startup India · 2020. 9. 11. · KERALA TOP PERFORMER 5 OVERVIEW OF STATE STARTUP ECOSYSTEM Kerala has been at the forefront of developing and promoting entrepreneurship

KERALATOP PERFORMER

STATES’ STARTUP RANKING 2019

KERALA | TOP PERFORMER2

Table of

Contents

1. Overview of State Startup Ecosystem ...................05

2. Snapshot of State Performance ..............................06

3. Pillar Wise Assessment ...............................................07

3.1. Institutional Support ..............................................................07

3.2. Simplifying Regulations .....................................................12

3.3. Easing Public Procurement ............................................14

3.4. Incubation Support ................................................................16

3.5. Seed Funding Support ........................................................18

3.6. Venture Funding Support ................................................20

3.7. Awareness and Outreach ...............................................22


5KERALA | TOP PERFORMER

OVERVIEW OF STATE STARTUP ECOSYSTEM

Kerala has been at the forefront of developing and promoting entrepreneurship. It has a structured startup ecosystem with a well-defined startup policy and regulatory infrastructure which has been well acknowledged by the Department for Promotion of Industry and Internal Trade (DPIIT). Kerala is the first and only state to have 1% of the state’s annual budget earmarked for entrepreneurship development activities.The Government of Kerala launched its startup policy ’Kerala Technology Startup Policy’ in 2014 with a vision to emerge as the number one destination in India for startups and be amongst the top five startup ecosystems in the world. The startup policy aims to create a world-class scientific and technology ecosystem that would empower and enable its youth to pursue their dreams within the state.

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The startup policy, along with the handbook for startups and incubators, provides details of the regulatory infrastructure for startups, the schemes and incentives available to them and the process to avail the same

The startup policy aims to achieve the following by year 2020:• Attract INR 5,000 crore

investments into the incubation and startup ecosystem

• Provide INR 2,500 crore for youth entrepreneurship activities

• Establish at least 10 technology business incubators in each of the different sectors of the state

• Develop one million square feet of incubation space

• Facilitate venture capital funding of atleast INR 2,000 crore

Some of the schemes and incentives offered are:• Capital and operational

assistance for establishment of space for incubators

• Rent subsidy to eligible startups for a maximum of three years

• Seed support of INR 10 to 15 lakh to startups in product development and growth stages

• Patent support system for reimbursement of patent cost of up to INR 2 lakh for domestic patents and INR 10 lakh for international patents

• Innovation grant of INR 2 lakh to be distributed through competitions and challenges organised by reputed organisations

• Direct procurement of mobile applications upto a maximum of INR 20 lakh from startup companies

The state’s startup portal is available at https://startupmission.kerala.gov.in/

The state has appointed Kerala Startup Mission (KSUM), set up under the Department of Electronics and Information Technology as the nodal agency for matters related to startups

The state is active in conducting startup networking events and sending entrepreneurs to international events. The state provides incentives to startups to attend national and international events by reimbursing their travel and visa related expenditure

https://startupmission.kerala.gov.in

https://startupmission.kerala.gov.in


SNAPSHOT OF STATE PERFORMANCE 02

Relative Performance of the State

Performance of the Best State in the pillar

Venture Funding Support

Seed Funding Support

Easing Public Procurement

Simplifying Regulations

Institutional Support

Awareness and Outreach

Incubation Support

The following representation details the status of Kerala’s implementation on each of the 7 pillars of assessment. Data presented below is the percentile score.

Kerala has been evaluated on 7 distinct pillars which largely contribute to the growth of the startup ecosystem in Kerala. The representation as expressed above depicts the relative performance of Kerala in each of the seven pillars in comparison to the performance of the best state in that pillar.

As shown above, Kerala has shown remarkable performance in ‘Venture Funding Support’ by being in the 100th percentile. Overall, the range of impact generated through all pillars to enhance the startup ecosystem in Kerala is noticeable through this representation.

Detailed analyses of this snapshot can be viewed in the subsequent section, with extensive insight into the initiatives taken Kerala to uplift its startup ecosystem.

100%28%

48%50%63%

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PILLAR-WISE ASSESSMENT

The state has a well-defined startup policy with specific focus areas and a reliable online implementation system for startups to register and avail incentives offered by the state government. Further, the state has a startup cell with a dedicated team to aid startups. It also has a system in place to provide intellectual property assistance to startups. There is strong support from various departments of the Kerala Government to promote the growth of the startup ecosystem of the state.• As per the policy, an entity is defined as a ‘startup’ if it meets the following conditions:

− The date of incorporation/registration is not prior to ten years, if it is incorporated as a Private Limited Company as defined in the Companies Act, 2013) or registered as a Partnership Firm (registered under section 59 of the Partnership Act, 1932) or a Limited Liability Partnership (under the Limited Liability Partnership Act, 2018) in India.

− Turnover of the entity for any fiscal year since incorporation does not exceed INR 100 crore − Entity is working towards innovation, development or improvement of products or processes or services, or if it has a scalable business model with a high potential for employment generation or wealth creation

• As per an order by the state in August 2018, the Kerala Startup Mission (KSUM) was designated as the nodal agency to deal with all matters related to startups

• The order also states that the Chief Executive of KSUM will serve as the nodal officer. Details of the Kerala Startup Mission team is available on the state’s startup portal. The team consists of a governing council and an operational team

• The state issues a Unique Identification Number (UIN) for startup recognition along with startup recognition certificates

KEY FACTS

1. INSTITUTIONAL SUPPORTInstitutional support envisages provisions and execution of the state’s startup policy including information on the nodal team within the state, online implementation system, registration of mentors and their listing on the state startup portal. The states are evaluated based on the laid provisions along with parameters of availing benefits through state intellectual property rights portal, establishing partnerships with institutions, providing special incentives for women led startups and entrepreneurship.

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Process of Registering a Startup Governing Council


KEY STRENGTHSWELL DEFINED STARTUP POLICY

• Kerala has a well-defined startup policy with clear guidelines on the definition and registration process for startups. The policy is sector agnostic

• The policy clearly outlines the incentives available for startups and processes to be followed to avail the same

− Rent subsidy

− Seed support

− Patent support

− Workshops and mentoring

− Innovation grants

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• Under its startup policy, the state has set up the Kerala State Innovation Council (KSInC) to devise innovative, efficient, sustainable and cost-effective measures for the economic development of the state

• The state has 550+ startups registered under its startup policy

ROBUST ONLINE IMPLEMENTATION SYSTEM

• The state has a comprehensive online implementation system (startups.startupmission.in) which allows startups to register themselves and track applications and generate certificates

• The state has maintained an interactive dashboard (month-to-date and year-to-date specific) highlighting the following

− Number of registered startups

− Number of seed funded startups

− Number of venture funded startups

− Number of incubators supported

− Number of purchase orders awarded

• The startup portal has a comprehensive mechanism for online receipt and resolution of queries and complaints

• The portal has a detailed list of incubators and mentors

STRONG INTELLECTUAL PROPERTY (IP) SUPPORT FOR STARTUPS

• The state has a strong mechanism in place to offer IP support to startups. The state offers IP support as per an order from November 2018, by the Electronics and Information Technology Department. The details of the support can be accessed on the state’s startup portal. The following guidelines apply for patent support:

− Support is provided as reimbursement of costs incurred for filing, prosecution and award of the patent

− Support is limited to INR 2 lakh for national patents & INR 10 lakh for international patents

COHESIVE PARTNERSHIPS TO FOSTER GROWTH OF THE STARTUP ECOSYSTEM

• The state has established tie ups with various technology solution providers such as Google Cloud, Amazon Web Services, Cleartax, Razorpay, Digital Ocean etc. As a result of these tie ups, the startups registered under KSUM can avail the services of these technology companies at subsidised rates


• Further, the state has also partnered with the following national/ international agencies for developing solutions in a host of areas:

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COMPREHENSIVE MECHANISM TO CONNECT WITH MENTORS

• The state has a mechanism in place to connect startups with mentors. The details of the mentors are accessible through the state’s startup portal

OPPO

KSUM has signed a MoU with OPPO. This collaboration will provide select startups access to an incubation programme launched by OPPO which aims to provide startups with technical and business expertise. The MoU also agrees to host the selected startups at OPPO’s Research and Development Centers for training and workshops. Furthermore, the collaboration aims to create synergies in areas of artificial intelligence, camera and image processing, gaming, payment gateways, system performance etc.

Wadhwani Foundation

Wadhwani foundation signed a MoU with KSUM for supporting startups in the state and creating a mutually rewarding ecosystem for all parties with a special focus on acceleration programmes for startups, entrepreneurial education and development of women led startups.

Unity Technologies

KSUM has partnered with Unity Technologies to launch a Center of Excellence for augmented reality and gaming. The center will provide different levels of training on developer tools for augmented reality to students and professionals in the state.

University of Illinois

KSUM and University of Illinois at Chicago have entered into a Memorandum of Understanding (MoU) to enable startups in Kerala to access infrastructure and obtain mentorship. The university will also provide support to set up a biomedical research facility in association with the Cochin Cancer Research Center. This will be the country’s first incubator for developing digital products for cancer diagnostics, prevention and care.

Airbus

The state has signed a MoU with Airbus BizLabs (a global aerospace accelerator, part of the Airbus group) to set up an incubation center in Thiruvananthapuram. The accelerator will also provide mentoring support to startups through workshops and discussions with experts from aerospace and defence sectors.

Center National d’Etudes Spatiales (CNES)

Kerala Startup Mission (KSUM) has entered into an agreement with France’s spaceagency, Center National d’Etudes Spatiales (CNES). The agreement will enable startups and small and medium companies operating within the Space Technology Application Development Ecosystem (STADE) in Kerala to gain market access to potential customers and investors in France, provided that they do not directly compete with French entities working on similar products or services. The agreement is a part of an initiative launched by CNES called ‘Connect by CNES’ to support the development of innovative products and services using space technology and solutions.

Future Group

The Kerala Startup Mission has tied up with the Future Group where KSUM will serve as a market access platform for the group allowing them to promote their business at events supported by KSUM. In return for this support, the Future Group will provide mentorship and technology support to startups registered with KSUM.


• Through the portal, mentors can register themselves and subsequently communicate with startups and offer their guidance and support

• The state maintains a list of startups that have successfully connected with mentors. The state has connected 250+ startups with mentors

STRONG INSTITUTIONAL SUPPORT FOR WOMEN ENTREPRENEURS

As part of the Youth Entrepreneurship Development Programme, the state has introduced the following incentives and benefits for women entrepreneurs • Pre-incubation support is provided to startups led by

women entrepreneurs and includes incubation, mentorship and technical support

• 100% reimbursement for Women Entrepreneurs

− Product showcasing costs

− Travel costs

− Marketing support costs (up to INR 5 Lakh per startup per year and valid for two years)

• The incentive also extends moratorium period of seed funds provided by the Kerala Startup Mission from one year to two years for women led startups

CONGENIAL SUPPORT SYSTEM CREATED BY STATE DEPARTMENTS TO PROMOTE THE GROWTH OF STARTUPS

The startup ecosystem in Kerala receives strong institutional support from various government departments in the form of hackathons and financial incentives. The departments providing support are: KE

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Kerala Police Department:

The Kerala Police Department along with the Kerala Startup Mission invited proposals from selected startups for establishing the Police Innovation Center. A total of 12 startups presented their ideas

Departmental Innovation Zones• KSUM has set up innovation zones in

partnership with Kerala State Electricity Board (KSEB) and Kerala Water Authority where innovators are given an opportunity to demonstrate their products and services

• Under KSEB – Energy Innovation Zone, nine projects were funded with an innovation grant of INR 54 lakh

• Similarly, KSUM partnered with Kerala Water Authority Innovation Zone for funding the man-hole cleaning robot project with an innovation grant of INR 27 lakh

Kerala Finance Corporation:• The Kerala Finance Corporation aims

to provide handholding and mentoring support to 100 startups. The scheme is meant to encourage new and innovative startups that have the potential to contribute significantly to employment generation in the state

• It also provides working capital funding support for startups younger than seven years and whose turnover has never exceeded INR 25 crore in any financial year.

Kerala State Industries Development Corporation:• The Kerala State Industries Development

Corporation has established a seed funding scheme under which a maximum of INR 25 Lakh will be provided to startups with innovative products

• The assistance is sanctioned as a soft loan for a period of one year after which the company shall either convert the loan to equity or repay with applicable interest. Till now, more than INR 15 crore has been sanctioned to 72 innovative startups operating across healthcare, agriculture, fintech, robotics etc

Department of Electronics and Information Technology:

As per orders released by the Electronics and Information Technology Department, government departments, Public Sector Undertakings, autonomous bodies, boards and local self-government institutions are permitted to select startups registered in Kerala for implementation of their IT projects costing between INR 20 lakh and INR 100 lakh

Kerala State Disaster Management Authority:

The State Disaster Management Authority with the support of Kerala Startup Mission and IBM hosted a two-day hackathon called ‘Call for Code Kerala’ which focused on disaster management. The theme of the hackathon, which saw participation by more than 25 startups, was to find an innovative solution for solving crisis that arise during the time of floods or other natural calamities


WAY FORWARD

From the list of initiatives carried out or proposed by the state as detailed above; the state has performed well in this pillar. There are additional steps that the state could take in order to build upon the initiatives further.

Towards this end, the state can prioritise actions required in three categories: short, medium and long term. Action required in each of these categories are summarised below:

SHORT TERM ACTIVITIES (1-3 MONTHS)The activities suggested in this category are important and will take relatively less time for implementation. Through dedicated efforts, results can be achieved within one to three months. Activities suggested under this category are as follows:

Publish complete profile of mentors on the state startup portal• The state could publish a complete profile of the mentors instead of names. This will help startups choose the mentors in a more

effective manner.

MEDIUM TERM ACTIVITIES (4-6 MONTHS)The activities suggested in this category are important and will take relatively more time for implementation. Through dedicated efforts, results can be achieved within four to six months. Activities suggested under this category are as follows:

Enhance coordination between state departments to help startups • Although various departments have established schemes to promote and foster the growth of startups, the state is encouraged to

further strengthen co-ordination with various departments to enhance the startup ecosystem. This would help in better implementation of schemes under the respective departments

Publish information related to women entrepreneurship• The state could provide a detailed list of unique women-led startups supported under the startup policy in the public domain to

encourage women entrepreneurs


2. SIMPLIFYING REGULATIONSSimplification of regulations considers mandatory requisites for state level approvals and clearances for registering and operating a business or startup online. In order to make compliance for startups friendly and flexible, simplifications are required in the regulatory regime. It encapsulates regulatory issues faced by registered startups which have been identified through an interactive online mechanism subject to approving action by regulatory agencies. The states are evaluated based on the support provided to startups by introducing a list of rules, regulations or Acts in the state, including amendments in the Acts and regulations with requisite details to create a conducive environment for the state’s startups.

The state has established an Ease of Doing Business (EoDB) portal (invest.kerala.gov.in/investment-wizard/) for startups to obtain state level approvals and clearances. The portal is linked to the state’s startup portal. Further, the state’s startup portal has an interactive mechanism in place to invite and identify regulatory issues faced by startups in disruptive technology areas. As per this mechanism, startups can raise a ticket for their regulatory issues and the state responds to the ticket through the same portal.

KEY FACTS

KEY STRENGTHSCOMPREHENSIVE BUSINESS COMPLIANCE AND INFORMATION SYSTEM FOR STARTUPS

• The state has a comprehensive and interactive online mechanism which provides information on state approvals and clearances required for registering and operating startups across various sectors in the state

• The mechanism is available on the Ease of Doing Business (EoDB) portal and the same has been linked with the state’s startup portal for ease of access

• The EoDB portal also features a list of department wise approvals and clearances along with application procedure, documentation and timelines for grant of approvals

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FAVOURABLE REGULATORY ENVIRONMENT FOR STARTUPS

The Electronics and Information Technology Department of Kerala has taken some major initiatives to establish a favourable regulatory environment for startups:• Through an order released in July 2019, the department

established the Massachusetts Institute of Technology super fab lab with advanced fabrication and machining capabilities at the integrated startup complex in Kalamassery

• The Department introduced a self-certification scheme for startups through an order released in July 2018. According to this scheme, startups can self-certify compliance with the following laws implemented by the state government

− The Building and Other Construction Workers Act

− The Inter State Migrant Workmen Act

− The Payment of Gratuity Act

− The Contract Labour Act

− The Employees’ Provident Funds and Miscellaneous Provisions Act

− The Employees’ State Insurance Act

• Through an order released in September 2018, the department introduced direct purchase of mobile applications, software products and services from startups up to a value of INR 20 lakh

• Through an order released in January 2019, the department introduced the Kerala High Achievers’ Startup (KHAS) fellowship scheme with fellowships to be granted to top ten percentile of students from various national institutions and deemed universities

WAY FORWARD


Towards this end, the state can prioritise actions required in three categories: short, medium and long term. Action required in each of these categories are summarised below


Provide exhaustive list of approvals and clearances on the startup portal• The state could improve its online compliance system by making the list of approvals and clearances mentioned on the portal

exhaustive, and submitting a declaration to that effect

LONG TERM ACTIVITIES (7 – 12 MONTHS)The activities suggested in this category are important and will take relatively more time for implementation. Through dedicated efforts, results can be achieved within seven to twelve months. Activities suggested under this category are as follows:

Provide regulatory ease to support startups in disruptive areas• Startups in disruptive technology areas/ business models could be provided regulatory ease to create a wave of entrepreneurship in

areas of businesses which are less explored. This is imperative to drive a large-scale change in developing the startup ecosystem in the state

− The fellowship is for INR 15,000 per month and is limited to a maximum of 24 months

− KHAS fellows are eligible for three seats free of cost in any of the state accredited incubators for setting up their startup facility. There is also the provision of rent waiver in case of already operating incubation units

− KHAS fellows get preference for international immersion visits

− KHAS fellows are eligible for placement holiday of a maximum of three years and accordingly are eligible to appear for campus placements in their respective colleges within three years of their graduation in case their startup venture fails to take off

• As per an order released in May 2019, the department established guidelines for aiding startups for attending national and international events

• Women entrepreneurship scheme providing pre-incubation support, business support and seed funding support to women led startups was established by the department through an order released in May 2019

• Through an order released in March 2019, the department established a scheme to set up a hardware accelerator at the integrated startup complex in Kochi

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3. EASING PUBLIC PROCUREMENTEase in public procurement simplifies criteria to ensure participation of startups in government tenders. The states are evaluated based on the support provided to startups in resolving issues related to state public procurement as norms of Earnest Money Deposit (EMD), prior experience, and prior turnover which prove to be barriers for participating startups. Easing of such norms enable startups and entrepreneurs to avail exemptions and share an equal platform with established organisations.

The state, through an order released by the Stores Purchase Department in September 2018, exempted startups from meeting the criteria of prior experience, prior turnover and submission of earnest money deposit. The startups need to register with the Purchase Department to avail these benefits. Further, via an order released in December 2018 by the Electronics & Information Technology Department, the state permitted Public Sector Companies, autonomous bodies, boards, corporations and local government institutions to select startups registered under the Kerala Startup Mission for design, development and implementation of their information technology projects costing between INR 20 lakh and INR 100 lakh. The state also has an online grievance redressal portal along with a time bound guideline for resolution of queries. The state has been successful in awarding a total of 25+ work orders to 15+ unique startups.

KEY FACTS

ROBUST GRIEVANCE REDRESSAL MECHANISM

• The state government has developed a robust online mechanism for receiving grievances and communicating resolutions on matters related to public procurement

• Startups can raise grievances on the state’s startup portal and communication of resolution of the grievances is undertaken through the same portal

• As per government order released in August 2019, the grievance raised by the startups are forwarded to the concerned Implementation Officer. If the query is not satisfactorily resolved within five days, it is forwarded to the Chief Executive Officer (CEO) of KSUM

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• Once the CEO of KSUM receives the query, it is satisfactorily resolved.


WAY FORWARD

The state needs to give importance to this pillar in order to further strengthen the startup ecosystem. The state could prioritise actions required in three categories: short, medium and long term. Action required in each of these categories are summarised below:

MEDIUM TERM ACTIVITIES (4 –6 MONTHS)The activities suggested in this category are important and will take relatively more time for implementation. Through dedicated efforts, results can be achieved within four to six months. Activities suggested under this category are:

Provide preference to startups in public procurement

The state is encouraged to further ease the procurement norms to reserve a certain percentage of volume or value of goods and services to be procured from startups

Increase the number of work orders awarded to startups • The state could consider increasing the number of work orders awarded to unique startups in the coming years in order to encourage

entrepreneurship and increase the share of startups in public procurement

• The state is encouraged to publish samples of Request for Proposal (RFP) documents demonstrating relaxation in the criteria for submission of EMD

Organising Annual Events• The state could also consider organising annual events where startups can demonstrate their capabilities directly to the government

and subsequently take part in public procurement activities


4. INCUBATION SUPPORTIncubation support is an integral element of the startup ecosystem that supports entrepreneurs to grow their businesses and assists new startups to succeed. In order to promote startups, the state governments collaborate with organisations, corporates or industry associates to establish incubators, to support startups in the form of capital expenditure or operational expenditure. The evaluation is based on setting up of incubators supported by the state governments to release funds to the startups, thereby creating a unique mechanism to provide subsidised incubation and operate acceleration programmes in partnership with the industry.

• The state’s startup policy has the following goals and incentives envisioned to promote incubators in the state: − Attract INR 5,000 crore in investments into the incubation and startup ecosystem − Incubate at least 10,000 product based technology startups − Develop one million square feet of incubation space

• A Government Order by the state released in May 2018 mentions that the government proposes to give subsidised infrastructure to startups to scale up in terms of built up space in government owned facilities

KEY FACTS

STRONG SUPPORT FOR SETTING UP OF NEW INCUBATORS AND UPGRADATION OF EXISTING INCUBATORS

• The state has provided startups with high quality incubation support system to nurture their growth. Through such systems, entrepreneurs are able to obtain funding and any other form of support such as market research and understanding required to grow their businesses

• The state is establishing the Kerala Technology Innovation Zone, a global innovation incubator hub for many technology sectors under an umbrella. The zone will create world class infrastructure facilities for multi sector technology incubators to incubate their startups and to support home grown enterprises

• As per its startup policy, the state has the objective to foster the growth of Technology Business Incubators (TBIs). The policy also proposes to set up innovation-based incubators across all higher education institutions in the state. Further, it proposes to set up an electronic platform that would function as a virtual incubator connecting all the stakeholders of the startup ecosystem

• The startup policy extends support for setting up sector specific and sector agnostic incubators. Under the policy, the state extends the following support to incubators:

− Capital assistance towards furnishing expense provided that furnishing is done in a government space for

− Operational assistance for a maximum period of five years

− Promotional support which includes grants and seed funds

− Mentoring support

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• The startup policy also proposes to set up an Incubation Infrastructure Development Fund which will support the development of physical incubation infrastructure through a Public Private Partnership model

• The state supports a total of 6 incubators through financial assistance for operational expenditure

− Maker Village, Ernakulam

− Mobile 10X, Calicut

− Krobs Bionest, Ernakulam

− Nasscom Startup Warehouse, Ernakulam

− International Center for Free and Open Source Software, Ernakulam

− Mizone, Kannur

• Further, the state has performed well to allocate a total of 1,700+ seats to startups in the state across 17 different operational incubators

PROMOTING ENTREPRENEURSHIP THROUGH ACCELERATION PROGRAMMES

• The state has initiated various acceleration programmes to provide startups with the opportunity to connect with investors and obtain funding support:


WAY FORWARD



MEDIUM TERM ACTIVITIES (4-6 MONTHS)The activities suggested in this category are important and will take relatively more time for implementation. Through dedicated efforts, results can be achieved within four to six months. Activities suggested under this category are as follows:

Encourage industry involvement in acceleration programmes and improve participation of startups• The state could conduct additional acceleration programmes in partnership with experienced industry players to promote innovation

amongst the startups. An increased outreach of the accelerator programmes across the state could to increase the scope of these programmes by facilitating the growth of greater number of startups

• The K accelerator programme is a three-month programme designed to help startups obtain market validation for products, meet with relevant customers and industry leaders, and connect with potential investors. The state has collaborated with Zone Startups India to roll out this programme.

• Unity technologies established a Center of Excellence (CoE) to provide immersive technology solutions for academics (school and university education), skill development, vocational training, and enterprise applications for industries, such as, defense, tourism, retail, construction and engineering. The XR Accelerator Programme is a joint venture between Unity Technologies Center of Excellence and the Future Technologies lab of the Kerala Startup Mission. The programme has been designed to support development in the field of augmented reality and gaming.

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• The Brinc accelerator programme is a three-month programme focused on computer hardware and internet of things. The programme provides support to mid stage startups that have a working prototype in place and are ready to move to the design phase for manufacturing


The state has performed well in establishing clear seed funding guidelines. Applications are invited through the state’s startup portal. Shortlisting is undertaken by a panel of experts and the shortlisted startups are asked to submit a two-minute video introduction of the product along with a fund utilisation plan. The shortlisted startups then pitch to a screening panel who evaluate the business worthiness of the idea. More than 90 startups have availed seed funding in the state.

KEY FACTS

5. SEED FUNDING SUPPORTSeed funding can be in the form of a direct grant, subsidised loan, product development and marketing financial assistance, monthly sustenance allowance or even equity seed funding. With seed funding, the evaluation is based on the states’ endeavour to help a business grow and generate its own capital by establishing a guiding document. The states need to ensure that startups scale with the right velocity in order to achieve leading positions, through state investment and startup’s entrepreneurial knowledge.

DETAILED SEED FUNDING GUIDELINES

• The state’s startup policy has clear guidelines for seed funding support. The innovation grant scheme and the seed support scheme detail out the eligibility, extent of support and procedure to avail the same

− Innovation Grant Scheme

• This scheme was envisioned to provide financial assistance to startups and entrepreneurs to help them convert their innovative ideas to full-fledged ventures

• The following are eligible to apply under the scheme:

− A student studying in Kerala

− An innovator based out of Kerala

− A startup registered in Kerala

• Various types of grants available under the scheme are:

− Idea Grant – Limited to INR 2 lakh/idea, primarily for conversion of idea to prototype

− Grant – Limited to INR 5 lakh/idea, to convert prototype to a Minimum Viable Product (MVP)

− Scale -up Grant – Limited to INR 5 lakh/idea, to help innovators with an MVP to develop the initial market

− Research and Development (R&D) Grant – Limited to INR 30 lakh/startup, offered to highly promising hardware startups with working prototype or IP which needs to be developed into a final product through extensive research and development

− Seed Support Scheme

• This scheme was introduced to provide financial assistance to startups to foster formation and development of innovative, technology-based business enterprises. The scheme is implemented through KSUM

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• Seed support would generally cater to prototype/MVP stage financing for commercialisation of the indigenous ideas, innovations and technologies

• Preference is given to startups with the Department for Promotion of Industry and Internal Trade startup certification

− Extent of funding under this scheme is:

• The support is limited to INR 15 lakh. The startup will be examined before putting the matter up to the seed support expert committee for selection

• Startups requiring seed support for only capital equipment may not be encouraged

INTERACTIVE ONLINE MECHANISM FOR SEED FUNDING

• The state’s startup portal has a well-defined online system for startups to apply for seed funding. Entrepreneurs can create a login on the portal and can apply and track the status of their seed funding applications in real time and obtain all necessary approvals for the same.


WAY FORWARD




Increase awareness related to seed funding• The state could expand its coverage by conducting events focused on connecting startups with investors. Such events would improve

the awareness of seed funding in the state and enable startups to obtain funding

Publish list of seed funding beneficiaries• The state could publish a detailed list of startups that have availed seed funding on the startup portal. Disclosure of such information

would improve transparency and instill confidence in the state’s startup ecosystem


6. VENTURE FUNDING SUPPORTVenture capital funding support is provided to the startups from state supported funds. The states are evaluated based on the establishment of the Fund of Funds (FoF) with approved operating guidelines and signing a memorandum of understanding (MoU) with the fund manager along with a concrete budget allocation. Venture funding provides strong growth potential to startups wherein the fund is used for the all-round development of startups and to levitate the startup ecosystem of the states.

The state has taken key steps to support venture funds by establishing clear guidelines for Alternate Investment Funds (AIF). The guidelines highlight the evaluation criteria, eligibility and the application procedure for applying to such funds. Currently, the state has extended support to four venture funds:

KEY FACTS

STRONG SUPPORT FOR VENTURE FUNDS

The state has established clear operating guidelines for selection of Securities and Exchange Board of India (SEBI) accredited AIFs. As part of the guidelines, the state invites proposals from SEBI registered AIFs, with the evaluation being undertaken in two stages technical and financial evaluation

The technical evaluation involves the following parameters• History, background and experience of the AIF and its

manager

• Ties to the Kerala startup ecosystem

• Investment culture and thesis as mentioned in the Private Placement Memorandum

• Tenure of the AIF and its current stage

• Legal and Regulatory compliances of the AIF

The financial evaluation involves the following parameters• Size of the investment committee

• Return on Investment

• Fee and Expenses

• Distribution Waterfall

Further, the recommended funds are required to make a presentation, post which they are awarded a final approval

Currently, the state has tie ups with four SEBI registered AIF’s

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Fund KSUM’s commitment (INR Crore)

Unicorn India Ventures 20

Indian Angels Network 15

Special Invest Fund 4

Exseed Electron Funding 20

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WAY FORWARD




Improve awareness related to venture funding

The state could expand its coverage by conducting events focused on connecting startups with investors.

Publish list of venture funding beneficiaries

The state could publish a detailed list of startups that have availed seed funding on the startup portal. Disclosure of such information would improve transparency and instill confidence in the state’s startup ecosystem.


7. AWARENESS AND OUTREACHIt is the endeavors of state governments to raise awareness about the Indian startup ecosystem and increase its outreach throughout the state. The states are evaluated based on awareness of startups created through workshops, national and international events including bootcamps and hackathons/ grand challenges. In order to promote startups, the state encourages participatory and inclusive processes for linking startups with angel investors and high net worth individuals. Maximum participation is encouraged for exchange of valuable knowledge amongst startups, and pitching sessions for angel investments with widespread propagation.

The state has been proactive in organising awareness and outreach events to help startups grow and prosper. The state conducted 150+ bootcamps and thirteen angel investment workshops. The state provided support to startups to attend 10+ national/international events. The state also conducted 10 hackathons/grand challenges. A few of them are presented below:IBM Call For Code Kerala• A two-day hackathon which saw innovative technology solutions for solving crisis that arise at the time of floods. It was

hosted by Kerala State Disaster Management Authority along with IBM and was attended by 25 startupsSingularly Global Impact Challenge• The seven-day programme saw participation from 25 startups and focused on solutions to address the following grand

challenges: − Learning, such as addressing skill shortage in emerging technologies and adoption of 21st-century skill sets

− Environment, such as solid waste management in urban and rural areas and air and water pollution in cities

− Health, such as access to cost-effective prevention, early diagnosis, and personalised therapy for individuals and communities

Kasarcode Hackathon• The event lasted for over 50 hours and saw participation from 10 successful startup founders. The participants presented

their prototype ideas and the top four startups in the competition received mentorship support from the founders of the Kasarcode community

KEY FACTS

PROMOTING ENTREPRENEURSHIP THROUGH BOOTCAMPS

• The state has conducted 150+ bootcamps. 8 of the bootcamps were part of the startup yatra programme which was held in November 2018 covering 22 districts of the state. The yatra experienced a footfall of more than 2,000 people across eight bootcamps with participation from more than 300 teams winning a total of INR 10 lakh in prize money. key highlights of the bootcamps (including specific events) conducted are

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Foundational skills in entrepreneurship

It was a beginner level programme for student driven startups to understand the nuances of entrepreneurship. It also talked about finance and legal process of the startups. Close to 30 batches were organised as part of the programme for students from Innovation and Entrepreneurship Development Cells (IEDC) in Kerala

Design Thinking Workshop

The workshop equipped students with a human centric mindset to problem solving. It had more than 300 participants

Product design and development

The workshop dealt with virtual product design with the objective to develop practical understanding of the engineering applications of technology. The workshop saw 87 participants spread across two months

Technical training programmes

The technical training programmes saw participation from 35 different educational institutes of the state with a total of over 1000 participants. The workshops involved programmes across Internet of Things, Java Programming, Mobile Application Development and Python Programming

Inspire Event 2019

Inspire was a one-day immersive learning programme, where student coordinators from IEDCs in Kerala were brought together for deliberating, brainstorming and creating awareness about IEDC and the importance of entrepreneurship


ORGANISING ANGEL INVESTMENT WORKSHOPS

The state has conducted the following angel investment workshops:• The state organised the Startup Investor Education

Programme called ‘Elevate for startups’ in the field of computer hardware, robotics, healthcare and rural sectors. The main objective of the programme was to educate professionals from these sectors about startups and relevant investment opportunities

• The state organised an investor meet called the ‘Investor café’ where startup companies looking for funds met with angel investors and venture capitalists to raise investments. More than 200 unique meetings were conducted between startups and investors over a period of six months

• The state organised the seeding ‘Kerala Investor Summit’ in association with Kerala State Industrial Development Corporation (KSIDC) co-hosted by ‘Lets Venture’ in Kochi to bring together a high net worth network of Kerala and provide them opportunities to invest in some of the best startups from Kerala and other parts of India. The following funds were present:

− Kae – Capital

− Arali Ventures

− SEA Fund

− Astarc Ventures

− Equanimity Investments

− Startup Xseed Ventures LLP

− WEH Ventures

− Sprout Venture Partners

− Special Invest

• The state organised a meet for funded startups called ‘Commune’ to facilitate interaction between entrepreneurs and the promoters of funded startups. It was attended by professionals from the following funds:

− Sea Fund

− Unicorn India Ventures

− Ivy Cap Ventures

− 3one4 Capital

− Indian Angel Network

• The state organised an Angel Investment Education Programme called ‘Ignite’ to create awareness about angel investing in startups amongst the potential investor community

STRONG SUPPORT TO STARTUPS FOR PARTICIPATION IN NATIONAL AND INTERNATIONAL EVENTS

• The state supported startups participated in 10+ national and international events. KSUM had published guidelines for national exposure in May 2019 which provided reimbursement of travel costs incurred by startups to attend national and international events. Some of the events towards which the state extended support were:

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− Digital Business World Congress (DES) event held in Madrid, Spain in May 2018 was an international 3-day event about the impact of digital transformation on the world and witnessed participation from business executives and country delegates across the globe

− Gitex future stars event held in Dubai, UAE in October 2018 was a platform for startups to showcase their products and services

− The consumer electronics show in Las Vegas, USA in January 2019 was an event where startups from the consumer electronics industry demonstrated their products

− Mobile world congress event held in Barcelona; Spain in February 2018 was one of the largest gatherings of the major players in the mobile phone industry

− DLD startup conference held in Tel Aviv, Israel in September 2018

− Startup Bahrain week held in March 2019

− London Tech Week held in June 2019 provided networking and business opportunities to technology startups

− Risecon Hong Kong event conducted in July 2019 was a gathering of prominent technology startups

− Kerala Startup Mission in association with the Federation of Indian Chambers of Commerce & Industry (FICCI) took a delegation of 7 startups to the Silicon Valley, USA in May 2019 to attend the TiEcon Silicon Valley and FICCI Delegation Programme

− Innovfest Unbound event held in Singapore in May 2019 for connecting startups working in disruptive technology areas

− IoT.show.in held in February 2019 in Bengaluru, India was an event focusing on the concept of Internet of Things

− Entrepreneur 2019 event held in New Delhi, India in July 2019

• Other events conducted by the state include:

− Huddle Kerala 2019 Kerala in collaboration with leading technology firms

organised a two-day congregation which featured a host of technology leaders and marketing experts and offered a unique platform for startups to showcase their products

− She Loves Tech & Women Startup Summit 2019 The event featured a startup competition primarily

to engage women entrepreneurs by giving them an exclusive arena to present their business ideas. More than ten startups had participated


WAY FORWARD



MEDIUM TERM ACTIVITIES (4 – 6 MONTHS)The activities suggested in this category are important and will take relatively more time for implementation. Through dedicated efforts, results can be achieved within four to six months. Activities suggested under this category are as follows:

Increase in organising more hackathons and grand challenges

Going forward, the state could increase the number of hackathons and grand challenges and expand to smaller cities as well


Notes


Notes


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KERALA - Startup India · 2020. 9. 11. · KERALA TOP PERFORMER 5 OVERVIEW OF STATE STARTUP ECOSYSTEM Kerala has been at the forefront of developing and promoting entrepreneurship