KARNATAKA · partnerships with institutes for courses and/ or research. Some of the notable...

KARNATAKATOP PERFORMER

STATES’ STARTUP RANKING 2019

KARNATAKA | TOP PERFORMER2

Table of

Contents

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

2. Snapshot of State Performance ..............................07

3. Pillar Wise Assessment ...............................................08

3.1. Institutional Support ..............................................................08

3.2. Simplifying Regulations .....................................................11

3.3. Easing Public Procurement ............................................13

3.4. Incubation Support ................................................................15

3.5. Seed Funding Support ........................................................17

3.6. Venture Funding Support ................................................19

3.7. Awareness and Outreach ...............................................21


5KARNATAKA | TOP PERFORMER

OVERVIEW OF STATE STARTUP ECOSYSTEM

Regarded as the Silicon Valley of India, Bengaluru, the capital of Karnataka, has always been at the forefront of driving India’s startup growth story. With 14 out of the 32 unicorns in India, hailing from Bengaluru, highlights how the city has always been receptive to new ideas. The capital city of Karnataka continues to brace its ever-growing startup community with equal support being received from other players in the ecosystem.

A well-developed startup ecosystem and the state startup policy plays a crucial role as engines of economic growth and development in a state. The Government of Karnataka launched ‘Karnataka Startup Policy 2015-2020’ in November 2015 to broaden and diversify the entrepreneurial community in the state through policy interventions and by leveraging the technology and innovation driven culture in Bengaluru.

01

THE KEY GOALS OF THE STARTUP POLICY ARE TO:

• Stimulate the growth of 20,000 technology based startups including 6,000 product startups in Karnataka• Create 6 lakh direct and 12 lakh indirect jobs in the startup sector• Mobilise INR 2,000 crore funding for investments in startups through Government’s intervention alone• Facilitate generation of at least 25 innovative technology solutions with a greater social impact

20,000STARTUPS

1,20,000JOBS

INR 2,000 CRORE INFUSION

25 INNOVATIVE TECHNOLOGY SOLUTIONS

THE KEY FEATURES OF THE POLICY ARE:• To expand the New Age Incubation Network (NAIN) under implementation in engineering colleges for all

professional and post-graduate institutions in Tier-II cities. • The institutes would be supported in the form of grants for operational expenses, annual financial support

for projects, training, capacity building etc.• To promote exposure visits and workshops for capacity building.• To provide support in the form of incentives and concessions such as reimbursement in tax, marketing

reimbursement, patent filing cost, promoting women entrepreneurship and financial assistance to startups.• The state Government would assist in setting up of Technology Business Incubators (TBIs) in institutions

of higher learning with well-developed research and development (R&D) facilities. This would provide an opportunity for research ideas to be converted into scalable business proposals.

• The state would provide funding in the form of grant-in-aid (up to INR 50 lakh to be released in tranches) to innovators who may need early stage funding.

• The state Government would also support private sector to setup incubation centers and accelerators or expand existing facility and operations on a Public Private Partnership (PPP) basis. The period of support would be three years.

• The state Government would maintain a list of common instrumentation facilities present across the state and open for public use.


The state has a dedicated startup portal (https://startup.karnataka.gov.in) which contains a list of incubators, incubatees, partners, acceleration programmes. and lists out the incentives available for startups and relevant links to avail such incentives

The nodal department for implementation of startup policy is the Department of Information Technology, Biotechnology and Science Technology (IT, BT and S&T). The nodal officer for development of startup ecosystem in the state is the Principal Secretary, Department of IT, BT and S&T

SOME OF THE KEY INCENTIVES OFFERED UNDER THE POLICY ARE:• Reimbursement of service tax paid by startups• Reimbursement of VAT or CST (now GST)• Marketing incentives to startups which include reimbursement of 30% of the actual costs up to a

maximum of INR 5 lakh per year per company.• The cost of filing and prosecution of patent application would be reimbursed to the incubated startup

companies subject to a limit of INR 2 lakh per Indian patent awarded.As per the Government of Karnataka, a sum of INR 58.14 crore has been disbursed against reimbursement for incentives by Karnataka Startup Cell till the end of the consideration period.

The state has a robust Startup Cell which comprises of a dedicated team to provide assistance to startups The startup cell in the state is led by a deputy head and comprises of other eleven full-time members

https://startup.karnataka.gov.in

https://startup.karnataka.gov.in


SNAPSHOT OF STATE PERFORMANCE 02

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

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

Karnataka has shown remarkable performance in ‘Easing Public Procurement’ and ‘Simplifying Regulations’ by being in the 100th percentile. The range of impact generated through ‘Institutional Support,’ ‘Incubation Support’ and ‘Awareness and Outreach’ are also noticeable through this representation. Although significant efforts have been made to enhance the startup ecosystem, the initiatives undertaken towards ‘Seed Funding Support’ and ‘Venture Funding Support’ require significant improvements since results in these pillars have been negligible.

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

0%

Venture Funding Support

0%

Seed Funding Support

100%

Easing Public Procurement

100%

Simplifying Regulations

74%

Institutional Support

15%

Awareness and Outreach

25%

Incubation Support

Relative Performance of the State

Performance of the Best State in the pillar


PILLAR-WISE ASSESSMENT

• The state has an exhaustive startup policy which provides tangible benefits to startups. The startup portal of the state is well laid out and easy to navigate and outlines information which is readily accessible without the need to ‘sign up’.

• The scheme ‘Unnati’ by the Department of Social Welfare supports startups by Scheduled Castes/Tribes through a comprehensive platform offering high amount of funding.

• The state attempts to inculcate entrepreneurship skills among women by providing an opportunity to help give shape to their ideas into workable models of business to enhance the confidence level of women entrepreneurs. The policy endorses one-third representation of women entrepreneurs and 10% incubation space reservation.

• Overall, the startups in the state have been the driver of change in providing accessible and affordable solutions to the ever changing consumer needs.

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.

03

KEY STRENGTHS

WELL-DEFINED STARTUP POLICY

• The policy is largely sector agnostic and the definition of a ‘startup’ is clearly defined in the policy.

• The policy envisaged that the startup in the state should be technology based; however, it was altered through an amendment with an appropriate alteration in the meaning of ‘startup’ in the policy, illustrated as follows:

− An entity working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation

− The startup must not be registered for more than 10 years. − The entity must be registered in Karnataka − The company should employ at least 50% of its total qualified workforce in Karnataka on full-time basis.

• The policy is readily accessible on the Karnataka startup portal https://startup.karnataka.gov.in/ and the operational guidelines on the portal specifies details of availing the schemes and eligibility criteria for startups in the state.

• On signing up on the portal, a startup can be easily registered as shown in the screenshot.

KEY

STRE

NG

THS

• On registration of an entity as a startup, the portal allows them to claim reimbursement wherever applicable which encourages the entities to register themselves online and avail necessary benefits for pertinent growth and development.

https://startup.karnataka.gov.in/


DEDICATED TEAM FOR GUIDING STARTUPS

• The Government has a dedicated team for supporting startups and their details are made available on the startup portal.

• The state has an established nodal department, the Department of IT, BT, and ST, for implementation of the policy. The development of startup ecosystem in the state is examined by the Principal Secretary, Department of IT, BT and S&T as the nodal officer of the state.

• The state has an separate startup cell which aims to promote the state of Karnataka as the ultimate startup destination in the world.

DEDICATED ONLINE IMPLEMENTATION SYSTEM

• The state has a dedicated startup portal (startup.karnataka.gov.in) with all the relevant information for stakeholders of the startup ecosystem consolidated at one place. The information available on portal consists of:

− An online system for registration, tracking, issuance of registration certificate, online query resolution system, call center number and incubation details (list of incubators, partner incubators and a list of incubatees)

− A publicly visible dashboard on the home page showing key highlights of startups in Karnataka

• It displays partner’s information (booster kit, list of mentors, academic institutes, and intellectual property (IP) facilitation centers)

• It also displays other information including funding details, operational guidelines document, incentives available and reports.

KEY

STRE

NG

THS

STRENGTHENED INTELLECTUAL PROPERTY (IP) SUPPORT

• The Government of Karnataka provides support for filing patents to the beneficiaries in terms of offering reimbursement as categorised below:

- FOR DOMESTIC PATENTS: The cost of filing and prosecution of patent application is reimbursed to the incubated startup company to a limit of INR 2 lakh per Indian patent awarded.

- FOR FOREIGN PATENTS: On a single subject matter, up to INR 10 lakh is reimbursed to the incubated startups.

• The reimbursement is made in two stages i.e., 75% post filing the patent and the balance 25% after the grant of the patent.

FOSTERING PARTNERSHIPS

• The Karnataka government has partnerships with institutes which can be accessed by logging on to the portal.

• The key international partnerships include those with Australia, Finland, France, Germany, Japan and a few other countries. There have been delegation visits by notable representatives from these countries for workshops and or collaborations

• The state government also has certain academic partnerships with institutes for courses and/ or research. Some of the notable institutes include Indian Institute of Science (IISC) and the Manipal University.

• The list of international partners, academic partners and central procurement agencies can be viewed on the portal under the ‘partners tab’.

AUGMENTATION OF WOMEN ENTREPRENEURSHIP

• Catalyst for Women Entrepreneurship (CWE) being a business Incubator of the Government of Karnataka provides space for women entrepreneurs with tech enabled enterprises in Bangalore. The incubator provides 20 seats and facilities for 12 months at the K-Tech Innovation Hub by ‘NASSCOM 10K Startup’ warehouse.

• The CWE platform provides mentoring and access to finance, markets, enabling technology, information and trade networks to the selected entrepreneurs and enables them to attain success and profitability in their businesses.

• The policy highlights the following provisions for women entrepreneurs:

− Reserving 10% incubation space for women entrepreneurs

− Ensuring one-third representation of women entrepreneurs, students and teachers etc

− Working of female employees in 3-shift operations with availability of general permission to operate during night hours specially for women led startups. This is subject to taking the prescribed precautions with respect to the safety & security of women employees


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 are:

Interactive startup portal• The government could consider creating a tab in the startup portal which gives details on registration of a startup and allows for

such applications to be smoothly filed online. The feature to apply may be clearly visible on the portal for both aspiring and registered startups without having the need to ‘sign up’ on the portal.

• The portal could highlight a list of startups receiving benefits from partnerships which would help in encouraging startups to build strong relationships for efficient operations and would enable transparency in terms of the support being offered.

• The portal may demarcate the industries in which the startups are being funded in order to motivate other startups to make use of such partnerships.

MENTOR NETWORK

• The state has created a robust mentor network comprising of experts from industry, academia and the startup ecosystem. Startups in the state are able to seek guidance from experienced professionals from the Indian business landscape. The portal provides the facility to startups in the state to view the LinkedIn profile of each mentor and connect with them.

• The portal displays a list of more than 100 registered mentors which in turn supports to build relationships that helps startups in the state break the inequality of opportunity.

COORDINATED SUPPORT FROM VARIOUS OTHER DEPARTMENTS

• The ‘Unnati Scheme’ under the Social Welfare Department of the state aims to provide a comprehensive entrepreneurship platform for Scheduled Castes/ Scheduled Tribes startups with ideas that have a social impact. The funding level is substantial and is up to INR 50 lakh, which is a one-time grant disbursed over two years on milestone basis to the startups in the state.

• The state has also collaborated with various other departments of the government to organise mentoring workshops. The supporting departments are Social Welfare Department, Transport Department, Department of Commerce & Industry, Karnataka State Natural Disaster Monitoring Centre, Directorate of Municipal Administration, Department of Agriculture

KEY

STRE

NG

THS


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.

• In order to promote startup ventures, with the prime objective to simplify regulatory provisions, including compliance with multiple rules, regulations, and Acts introduced or amended to support the startups, startup portal has a robust business compliance system. The regulations relating to approvals and clearances along with industry consultations have been conceptualised and rolled out in the state.

• The state has a robust Business Compliance and Information System (BCIS) in place to guide entrepreneurs in registering and operating a startup. The portal has a system in place wherein startups can participate in the policy-making process through the online consultation mechanism.

• Further, the state has provisions in sector specific policies to promote startups. The key sectors include manufacturing, biotechnology, electric vehicles (EV), energy storage and animation & visual effects.

KEY FACTS

KEY STRENGTHS

IDENTIFICATION OF REGULATORY ISSUES

• In order to address regulatory issues, the state has laid out a process for drafting of policies for startups which would help to identify such issues through stakeholder consultation. The process to draft a policy that has been defined by the state government is as follows:

1. Technology Selection & Prioritisation: The Karnataka Innovation Authority and Startup Cell

Department would identify the technologies that it intends to prioritise on a yearly basis for support & promotion.

2. Stakeholder Consultations: The department intends to hold recurring consultations

with industry associations, academia, startups and other relevant stakeholders to identify and draft regulations that should be introduced considering long-term impact of specific technology/ business model.

3. Technology specific frameworks: Post consultations, review and feedback from various

groups on the prioritised technologies and corresponding regulations, the department identifies the action required for every specific technology or sub-technology.

• Thus, in order to create a comprehensive policy for implementation of startups, the state encourages the startups to provide inputs in drafting the policies with regulatory coherence and provide their support in the structuring of such policies for a well-ordered execution.

ROBUST BUSINESS COMPLIANCE AND MECHANISM FOR REGULATORY ISSUES

Startups may avail the facility of approvals and clearances required for registering and operating a business through online portal (https://startup.karnataka.gov.in/resources/). This is in the form of Frequently Asked Questions (FAQs) on the portal.

AMENDMENTS IN RULES, REGULATION OR ACTS FOR SUPPORTING STARTUPS

• The state has constituted a ‘Tech Regulatory Committee’ with the Karnataka Innovation & Technology Society as convener and representatives of other departments as members to look into and report on the granular aspects of the specific emerging technologies and their implication. This is done in order to review and re-orient appropriately the regulatory framework and respond to the dynamics of the rapidly evolving technological scenarios.KE

Y ST

REN

GTH

S

KARNATAKA BIOTECHNOLOGY POLICY 2017-22The policy encourages R&D in emerging technology areas, such as synthetic biology, diagnostics and management of rare diseases, anti-microbial resistance, aqua-marine biotechnology, animal biotechnology, bio-manufacturing, and development of affordable medical devices, to foster the bio-economy growth.

https://startup.karnataka.gov.in/


KEY

STRE

NG

THS

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 are:

Interactive online mechanism• The state may make the portal more interactive by adding a chatbot to the main website to help in real time problem-solving for the

startups. The feature would enable them to get customised responses instead of standardised FAQs currently available on the website.

• Although the mechanism for disruptive technologies currently consists of impact assessment, stakeholder consultation and publishing decisions, but it does not have a time-bound mechanism to deal with the queries. A timeframe may be provided on the portal for resolution of issues for startups in the state.

MEDIUM TERM ACTIVITIES (4-6 MONTHS):The activities suggested in this category are equally 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:

Robust mechanism to resolve regulatory issues• There is a need for quarterly roundtables/ workshops to resolve sector specific regulatory issues. This would include a two-way

communication between startups and relevant government departments aimed at direct consultation and grievance redressal.

• The state may help startups in identifying the constraints in doing business and support the ecosystem in improving the overall business environment in order to reduce the grievances and make the redressal mechanism more robust for startups in the state.

KARNATAKA ELECTRONICS SYSTEM DESIGN AND MANUFACTURING POLICY 2017-22The policy is developed to provide the necessary impetus to take advantage of the dormant capabilities across various electronics markets with the aim of making local electronics system design and manufacturing sector globally competitive. It is expected to give thrust to 3D printing, robotics, Internet of Things (IoT), big data, Artificial Intelligence (AI), machine learning, stem cell research among others.

KARNATAKA ANIMATION, VISUAL EFFECTS, GAMING AND COMICS POLICY 2017-22

KARNATAKA OPEN DATA INITIATIVE (K-ODI)

KARNATAKA ELECTRIC VEHICLE & ENERGY STORAGE POLICY 2017

Government of Karnataka aims to foster Animation, Visual effects, Gaming and Comics (AVGC) industry to build sustainability, scale, create a critical mass and support the development of creatives in the state. To facilitate various objectives, a policy with a host of incentives and concessions shall be applicable for the industry throughout the policy period.

Government of Karnataka collects and generates a wide variety of data and information. There is a wide adoption of e-governance solutions in virtually every department of the Government. K-ODI is an initiative to provide proactive and open access to the data generated through public funds by departments/organisations of the government, and to increase transparency, accountability, citizen engagement, collaboration, good governance, decision-making & innovation. In the budget speech of FY 2019-20, INR 5 crore was earmarked for the K-ODI project. The open data platform contains the following modules:

− Data Management System (DMS) to be added on the homepage of the website after approval process of data catalogue of various organisations

− Content Management System (CMS) at the stage of open Government data and performance of tasks and upgrades

− Visitor Relationship Management (VRM) to codify the citizens response to dense aggregation

− Community: Citizens to share their suggestions by enabling them to communicate with each other

First of its kind electric vehicle policy was issued by the state that aims to develop Bengaluru as the EV capital of India. The key objective of the policy is to maintain the lead share of Karnataka as a preferred destination for attracting investments in the manufacturing of Electric Vehicles. Further, the policy aims to attract an investment of INR 310 billion and create about 55,000 jobs in the state.

Karnataka has been a pioneer in developing policies around electric vehicles and there exists ‘Electric Vehicle and Energy Storage Policy- 2017, for a period of five years. The initiative is in line with the union Government’s vision to make the country an all-electric vehicle market by 2031.


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.

KEY STRENGTHS

RELAXATION IN PRIOR EXPERIENCE, PRIOR TURNOVER AND SUBMISSION OF EMD CRITERIA

The state government owned Karnataka State Electronics Development Corporation Limited (KEONICS) has the following provisions for startups in the state:• Complete relaxation has been given to startups for the

criteria of ‘prior experience’ and ‘prior turnover’

• Relaxation in submission of EMD for startups is also provided by the state for encouraging startups.

PREFERENCE IN PUBLIC PROCUREMENT

The state government provides following relaxations/ preferences for all registered startups with the startup cell of KBITS (Karnataka Biotechnology and Information Technology Services) for public procurement of goods & services:• 50% discount is made available on all non-refundable

royalty which has a validity for 2 years.

• A set target of 10% of the procurement by the state Government is availed through startups to foster rapid growth and to present useful pilot opportunities for startups

STRONG GRIEVANCE REDRESSAL MECHANISM

• The state government also has a centralised online and offline grievance management system that addresses issues raised by startups related to public procurement

• To make the system more effective, the state has taken the following measures

• Assigned a dedicated officer for evaluation and resolution of all such issues.

• The grievance management system is placed by the state to communicate issues raised by startups. The state discusses the concerns of startups related to Government procurement with designated departments or agencies executing in consonance with them.

• The system is a centralised online/ offline mechanism in KEONICS for startups to submit their concerns pertaining to the Government/ PSU procurement.

STARTUPS AWARDED WORK ORDERS

Under ‘Elevate 2019’, the Karnataka Innovation & Technology Society (KITS) awarded work orders to 60+ startups for development & supply of device/software amounting to INR 49 lakh(exclusive of tax amount, approx. INR 80,000 each) during the period May 2018 to September 2019. This is considered as a best practice across other states.

KEY

STRE

NG

THS

• The portal provides complete exemption to startups from criteria of ‘prior experience’, ‘turnover’ and ‘submission of EMD’ to provide equal opportunity to entrepreneurs in the state. Such exemptions encourage startups to participate in public procurement with ease.

• ‘ELEVATE, 2019’ is a unique concept initiated by the Government of Karnataka to promote entrepreneurship through innovation by declaring grants for startups. As part of the programme, the Government provides a comprehensive entrepreneurship platform that includes idea validation, funding and space, among others to attain relevant work orders.

• Under ‘ELEVATE, 2019’, the state Government has awarded a total of INR 49 lakh which is an open call to startups in the state.• Startup Cell analysed and nominated startups from among the Elevate winners for product offering/ value proposition with

State Departments / PSU / Local bodies. • Startups selected by Idea2PoC evaluation committee were provided with a work order of up to INR 1 Lakh from Karnataka

Innovation and Technology Society (KITS) for supplying their product offering/value proposition in addition to the Elevate grant money.

KEY FACTS


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:

MEDIUM TERM ACTIVITIES (4-6 MONTHS): The activities suggested in this category are equally 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:

Preference in public procurement• The state could encourage innovative startups by giving preference to them in procurement by Government Departments/ Boards /

State PSUs and other organizations.

• The preferential treatment to startups would help the state to infuse technology into several new sectors in the state and would further encourage development of the innovative products.

• The regulatory norms relating to procurement could help startups gain experience which may prove to be catalytic in terms of generating employment and enhancing competition.

Development of an integrated web portal

The state is encouraged to develop an integrated web portal on which the information of all the government tenders and relaxed government norms could be displayed. This would present pilot opportunities for startups that have not been able to gain traction in the private sector.

Incentivise women-led startups

The state could take additional initiatives to incentivise women startups. In consonance with the state procurement guidelines, the state may make a provision to provide grant-in-aid of a set percentage and boost ease of doing business for women-led startups.


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 has devised a high-quality incubation support system to nurture the growth of startups. Subsidised seats are offered by incubators under PPP mode. Hence, the quality of infrastructure and environment offered by incubators under PPP mode maybe better than the purely public ones. In addition, the state Government has Centers of Excellence (CoE) that function as accelerators hand holding startups for a period of 12 months.

• An incubator-wise list has been prepared for the seats allocated for each startup in Karnataka.

KEY FACTS

KEY STRENGTHS

SETTING UP OF NEW INCUBATORS

• The state has 40+ incubators listed under four different categories:

− K-Tech Innovation Hubs,

− Incubators/ Common Instrumentation Facilities,

− K-Tech Technology Incubators and

− Incubators under K-Tech New Age Innovation Network.

INCREASED NUMBER OF SEATS FOR STARTUPS

• 665+ seats have been allocated cumulatively by all incubators in Karnataka to more than 225 startups

FOSTERING SUBSIDISED INCUBATION

• The policy under the section ‘Creating Incubation Infrastructure through PPP’ provides subsidised seats for startups in PPP incubators and accelerators setup in the state. It recommends charges of INR 3,000 per seat per month which is limited to five seats per incubatee.

• The list of key incubators offering subsidised seats are showcased on the right.

KEY

STRE

NG

THS

Incubation Center

Number of startups that received subsidised innovation

Subsidy offered

K-tech Innovation Hub, Startup Warehouse

100+

Subsidised Incubation rate of INR 4000 (+GST) and INR 2000 (+GST) for women entrepreneurs

K-tech Innovation Hub by Bangalore Bio-innovation Center

45+

Subsidised incubation rate of INR 110 per sqft. and NIL for women entrepreneurs

K-tech Innovation Hub, Mobile10x

20+Subsidised incubation rate of INR 5000 per seat

ORGANISE ACCELERATION PROGRAMMES

The Government of Karnataka in collaboration with partners from the industry and academia has set up eight sector-focused CoE that also act as accelerators and onebio-accelerator programme under Bangalore Bioinnovation Centre (BBC), to handhold startups for a period of 12 months. The services provided as part of the acceleration programmes are:• Mentorship

• Partnerships

• Funding Assistance

• Market Access

• Participation in Industry Programmes


WAY FORWARD



MEDIUM TERM ACTIVITIES (4-6 MONTHS): The activities suggested in this category are equally 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:

Number of seats for startups

Greater focus may be given to advertise available seats for startups in order to enable higher participation in utilising the infrastructure as well as in creating an environment that is conducive to helping ideas translate to commercialisation.


5. SEED FUNDING SUPPORT Seed 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’ endeavor to help a business grow and generate its own capital by establishing a guideline 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.

• Government of Karnataka provides seed funding under the ‘Idea2PoC’ scheme of the Startup Policy of Karnataka 2015-20. Idea2PoC through ‘ELEVATE 2019’ is given in the form of grant-in-aid but limited to a one time grant of up to INR 50 lakh. Funding is released in tranches as per the project milestones agreed upon in the memorandum of agreement between the startup and Karnataka Biotechnology and Information Technology Services (KBITS).

• The mechanism and guidelines for seed funding are elaborated and the process is transparently available on the portal under the operational guidelines of seed funding for state startups.

• A total of 245+ startups have benefitted from seed funding support in the state.

KEY FACTS

KEY STRENGTHS

SEED FUNDING GUIDELINES ACCESSIBLE IN PUBLIC DOMAIN

The guidelines for application of grant may be viewed in the operational guidelines as well as the state startup portal under funding support. For example, the URL for applying for funding through the ‘ELEVATE 2019’ scheme is: https://startup.karnataka.gov.in/idea2poc/

INTERACTIVE ONLINE SYSTEM FOR SEED FUNDING

Startups in the state have access to a specific portal to check the status of their seed funding (https://startup.karnataka.gov.in/elevate/). This makes it easier for the startups to follow-up on fund approval and disbursal status and observe the automation of the entire disbursal process.

The following functions are easily performed through the portal:• Apply for registration by filling up and submitting the form

online.

• Track the status of startups application through the dashboard post logging in

• Download the registration certificates from the portal that will be available as part of their post approval process.

• Get email notifications on application submission and approvals of registration

SEED FUNDING BENEFICIARIES

Under the provision of seed funding initiative, the state government has provided financial support to beneficiaries having received the seed funding in the form of a grant.

Government of Karnataka has provided benefits to the following number of startups through designated calls:

Calls Number of beneficiary startups

ELEVATE 2018 77

Assisted Accelerated Idea2PoC

10

ELEVATE 2019 95

UNNATI Scheme 18

StartUp Yatra 12

ESDM StartUp Incentives

21

StartUp Incentives 15

Total 248

KEY

STRE

NG

THS

https://startup.karnataka.gov.in/idea2poc/

https://startup.karnataka.gov.in/idea2poc/

https://startup.karnataka.gov.in/elevate/

https://startup.karnataka.gov.in/elevate/


WAY FORWARD



LONG TERM ACTIVITIES (7-12 MONTHS): The activities suggested in this category are equally important but will take more time for implementation. Activities suggested under this category are:

Creation of avenues for seed funding• The state government could work on creating more avenues to source seed funding for startups. The kind of fund offered could also

be monthly sustenance allowance, subsidised loans or function specific financial assistance (such as for product development or marketing).

• The amount of seed funding offered to startups could be improved by partnering with High Net worth Individuals (HNIs) and other venture capital funds.


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 Funds of Fund (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 an active investor community which consists of state owned venture capital fund, Karnataka Information Technology Venture Capital Fund (KITVEN Fund), backed by a Venture Capital Fund (VCF).

KEY FACTS

KEY STRENGTHS

SUPPORT TO VENTURE FUNDS

In Karnataka, currently the venture funding support is provided through Karnataka Information Technology Venture Capital Fund (KITVEN Fund) which is a state and central Government financial institution backed Venture Capital Fund (VCF). The VCF operates in the state since 1999. The fund would be managed by Kerela Agro Machinery Corporations Limited (KAMCO) as the fund manager. The guidelines that need to be followed by entrepreneurs for submitting their executive summaries are viewed in the URL below:

http://www.kitven.com/guidelines-for-entrepreneurs

The budget allocated as per the MoU signed in November 2018 is INR 20 crore

KEY

STRE

NG

THS

STARTUPS FUNDED FROM VENTURE FUNDS

Karnataka has set up a dedicated fund by the name KITVEN 4 (AVGC) in order to assist startups in the field of animation, video, gaming and comics. The fund undertakes investment in the range of INR 50 lakh to INR 100 lakh per company during the initial stage which can go up to INR 2 crore per company at a later stage.

The state submitted a list of startups that have been funded by the following Fund of Funds–• Karnataka Semiconductor Venture Capital Fund

(KARSEMVEN)

• Karnataka Information Technology Venture Capital Fund (KITVEN) 3 Biotech

• Karnataka State Financial Corporation (KSFC)

http://www.kitven.com/guidelines-for-entrepreneurs


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:

Strong venture funding support

The state may foster an entrepreneurial culture wherein a channel of communication between the entrepreneurs, investors and mentors should be created for progressive interaction in parlance to the effective funding of startups in the state. The initiative would help proposing financial assistance to the existing and the aspiring startups resulting in the growth of the overall startup ecosystem.

Increased venture capital funds

The state should make endeavours to collaborate between existing startups and aspiring startups as a key to foster involvement of venture capitalists in a manner that it builds a strong startup business community facilitating an immense growth of startups in the state.

LONG TERM ACTIVITIES (7-12 MONTHS):The activities suggested in this category are equally important but will take more time for implementation. Activities suggested under this category are:

Increased investment by state for startups• The state government may work on identifying and inviting Alternative Investment Fund (AIF) to invest in potential startups.

• An ecosystem could be made wherein investments are made in a bouquet of funds such as Infrastructure Fund, Angel Fund and Social Venture Fund wherein startups can avail money from any one the relevant funds. This in turn would also give an opportunity to a wide variety of startups to participate.


7. AWARENESS AND OUTREACHIt is the endeavor 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 is active in organising bootcamps, hackathons, angel investor meets and international events. The state government has successfully organised events and witnessed participation from across districts of the state in themes that included healthcare, agriculture and transport. The bootcamps were organised across 30 districts, 27 of which saw participation of 100 students. The hackathon organised by the department saw submissions in areas of healthcare, water, agriculture, transport and waste with a maximum prize money of INR 5 lakh.

KEY FACTS

PROMOTING ENTREPRENEURSHIP THROUGH BOOTCAMPS

E-Step• E-Step is an initiative from Karnataka startup cell in order

to empower students in Karnataka and also caters to the needs of the growing startup community of the state. E-Step is operational under KITS and acts as the single point of contact and a facilitating body to promote the Karnataka Startup Ecosystem.

• Under the E-Step initiative various bootcamps and mentorship workshops are conducted by various industry partners, startup founders, policy makers, and technical experts to explain the basics of entrepreneurship to the students.

• Government of Karnataka conducted bootcamps for students of the New Age Incubation Network (NAIN) colleges under the startup policy of Karnataka. This was done to foster a sense of entrepreneurship among the students.

• Entrepreneurship education aids students to think outside the box and nurture unconventional talents and skills.

• Under the first phase of E-Step, day long bootcamps were organised in 30 New Age Incubation Network Institutions across 19 out of 30 districts of the state.

• The bootcamps focused on the following aspects of entrepreneurship such as -

− Trainings for technologies making the students more relevant to today’s ecosystem

− Explaining the challenges an entrepreneur undertakes

− Steps to take while pitching ideas to investors

• A total of 30 bootcamps were conducted, out of which 27 saw participation from more than 100 students and were conducted for more than 8 hours.

KEY

STRE

NG

THS

KEY STRENGTHS


KEY

STRE

NG

THS

ORGANISING HACKATHON’S

• During the months of November-December 2018, the Department of IT & BT, Government of Karnataka conducted a Virtual Global Hackathon titled ‘Bengaluru Tech Summit (BTS). in collaboration with Global Innovation Alliance Partners and Startup Innovation Hubs from across the globe. The 2018-19 theme of the Hackathon was ‘Innovation & Impact’.

• The mission of BTS Global Hackathon was to create technology solutions and initiatives that contribute to the social good and address the challenges faced in the following sectors:

• Healthcare - Use of technology to create smart healthcare solutions for people residing in urban centers. A unified healthcare system, with collecting and sharing of data along with analysis and research practices, is what would determine the future of urban healthcare.

• Water - A city cannot be truly smart without smart water infrastructure. Develop technology solutions for more efficient plant operations, optimisation of pumping, asset management, power usage optimisation, leak detection, detection of contaminants and consumer access to individual usage.

• Agriculture - Sustainable food production is an urgent task, considering climate change and pressure on natural resources. How can technology contribute to food production in an urban environment?

• Transport - Cities all across the world are growing at a rapid rate. The transportation services should scale with the growing needs. Great infrastructure and transport are required for rapid expansions in every aspect. Develop smart transport solutions for growing needs of economy.

• Waste - As our cities are getting bigger, we are accumulating waste all around us. Come up with innovative ways to make urban waste management more automated and efficient.

ORGANISING ANGEL INVESTMENT WORKSHOPS

• Karnataka provided the following benefits to both registered angel investors and startups from the Startup Karnataka portal –

− Connection between investors and startups in the state

− Free entry to all startup related events of the state

• The state in association with the Internet and Mobile Association of India, conducted Mobile 10x event. The event consisted of interactive sessions such as fund raising, investment and pitching sessions, among others.

• The following partners organized 5 pitch days and various interactive sessions at Mobile 10x –

− Rebright Partners

− Hyderabad Angels

− Indian Angel Network

− Let’s Venture

• More than 30 startups participated in the Mobile 10x event

PRIZE DISTRIBUTION WAS AS FOLLOWS:

1st Prize

INR 5 lakh2nd Prize

INR 3 lakh3rd Prize

INR 1 lakh

NUMBER OF SUBMISSIONS

HEALTHCARE

112WATER

32AGRICULTURE

51TRANSPORTATION

64WASTE

45


NATIONAL/INTERNATIONAL WORKSHOPS

29th April – 5th May 2018 InnoTrek 2018 – San Francisco

8th – 9th October 2018

EU-India Incubators and Accelerators Network

May 2018 Global Innovation Alliances (GIA): Tech Engagement – The Netherlands

June 2018 BIO International Convention, Boston

June 2019 BIO International Convention

10th June 2019 GIA Tech Engagement - Switzerland

• The state has set up Karnataka Unit for International Cooperation (KUIC) for handling all international partnerships. KUIC has been instrumental in collaborating with international partners and strengthening Karnataka’s startup ecosystem. Various Global Innovation Alliances (GIAs) have been established with innovative economies of the world. A professional consulting firm has been entrusted to implement the activities of KUIC in order to boost the startup ecosystem.

• The Government of Karnataka provides support in the form of grants, reimbursement, allowance, sponsorship for startups to participate in events. The application procedure for availing the assistance is provided in the operational guidelines which can be accessed from the startup portal. The operational guidelines of the startup policy explicitly mention the details on the eligibility, selection process along with the support and assistance provided for national and international events. Karnataka has conducted events as per the details provided on the right here.


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:

Conducting educational training and events• Students or aspiring entrepreneurs require basic understanding of ideation, business planning, finance, legal and pitching before they

venture out to run a startup. Government of Karnataka organised entrepreneurship development programmes in select institutions and going forward, the state may conduct such trainings and events in other educational institutes of the state as well.

• The government could focus on advertising angel investment workshops in a better way in order to have better participation from startups (at least 50 startups for every event).

LONG TERM ACTIVITIES (7 TO 12 MONTHS):The activities suggested in this category are equally important but will take more time for implementation. Activities suggested under this category are:

Improvement in organisation of Hackathons and Bootcamps• The government could focus on bootcamps in collaboration with existing institutional infrastructure. The bootcamps may be mentored

by experts from the startup ecosystem or seasoned industry professionals to enable the state to conduct such programmes on a frequent basis. Also, a sequential record with all relevant details could be maintained by the state to have a vigil mechanism in place and analyse the pathway taken by the state towards building the spirit of entrepreneurship.

• The state government has organised a single hackathon. The government could organise more hackathons to serve as a platform for disruptive solutions and a potential opportunity for building such solutions as product offerings. Increased participation in hackathons would enable the state to collaborate intensively and mobilise the startup and entrepreneurial community to build an innovative startup ecosystem.

Improvement in organisation of national and international events• The government could establish clear guidelines pertaining to financial and non-financial assistance for startups and foster participation

in national or international entrepreneurship events or conferences.

• The government could reimburse travel and lodging expenses as incentives to startups to attend national and global events.

• The government could also generate partnerships with other countries/international agencies such as educational institutions, incubators and accelerators for knowledge exchange.


Notes


Notes


CONTACT US

www.startupindia.gov.in

[email protected]

1800-115-565

Date post:	28-Oct-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

KARNATAKA · partnerships with institutes for courses and/ or research. Some of the notable...

Documents