The Karnataka government says it is looking to reach and aid at least 1,000 start-ups from smaller cities and towns over the next two months.
This is part of its 'Elevate' programme, to identify 100 of the most innovative start-ups across sectors in the state.
The government is partnering with the Deshpande Foundation and The Indus Entrepreneurs in this regard. Once identified, these start-ups will get funds from the state or through venture capitalists (VCs) or angel investors.
“We’re trying to identify the top 100 innovative companies and see how we can help them. Whether in the form of funding, mentoring, legal help or anything else they would want,” said Priyank Kharge, minister for information technology and tourism. “I know most of them will be looking for funding. So, we are trying to bring in local VCs, as well as HNIs (high net worth individuals) and some from the private eco-system.”
Elevate will see the state setting up camps at Mangaluru, Mysuru, Hubballi and in Bengaluru. The government aims to expand the start-up system beyond this city. In the past six months, it says it has funded around 55 start-ups, giving out around Rs 17 crores. More than on fund has been established for this backing. One of these gives Rs 50 lakh to a start-up that can build a prototype of its product and prove its worthiness. Around Rs 200 crore has been set aside for a 'fund of funds'.
“I might be looking for the 100 most innovative companies but in the process, I might end up finding the next 200. I don’t know the numbers but we might even be able to validate some of these ideas that can then come back to us maybe a year later,” added Kharge.
His government is looking to be a facilitator, rather than an investor itself. Elevate hopes to bring in a trove of investors and mentors, to help the chosen start-ups grow their ideas and eventually become businesses.
Kharge says he’s seen many start-ups fail not because of lack of money but the lack of mentorship. That includes support in legal matters, in accounting and in applying for patents. While investments will definitely be on tap, the government wants to help put in place the rest of the eco-system, to work “independently of the government”.
For smaller entities looking to tackle grassroot problems, the government says it has so far backed 163 such projects, 18 of which have been incorporated and having produced three patents so far. The size of an investment in such firms is roughly around Rs 3 lakh each, which the state says it is more than happy to plough in if it continues to see results.