THIRUVANANTHAPURAM: The economy is still struggling to wriggle out of the effects of the second wave of the pandemic. However, one sector in the state that has bucked the trend is the startup. According to data compiled by an IT expert, startup companies in IT and biotechnology sectors have raised roughly Rs 1,642.50 crore ($219 million) this calendar year in 26 deals till November.
This is the first time that investments in the sector in the state have crossed Rs 1,000 crore in one year. This is also the highest amount raised by state startups in the past 10 years. Last year, startups had managed to raise only $53 million in 25 deals. Interestingly, this year more startups got investments as compared to last year. Among the 26 companies, 21 SaaS (Software as a Service)-based startups attracted more investments from angel investors and private equities.
Data shows the trend is not restricted to Kerala. Across the country, many companies in the sector have received investments showing investors’ appetite for the sector’s growth story. While the sector raised Rs 32,250 crore in November alone, Kerala received only a tiny fraction of the total investment. The data is based on the performance of companies that have been in the business for less than 10 years. Currently, around 2,900 startups function in the state, according to the data available with the Kerala Startup Mission.
Of the 26 startups that raised funding, 17 are in Kochi, seven in Thiruvananthapuram, and one each from Kozhikode and Thrissur. “Though the Kerala funding numbers show a considerable increase compared to previous years, it is still a minuscule fraction of the total funding received by startups in the entire country. We are growing, yes. But other states are growing too, and some of them are at a faster pace. We have much to catch up with,” said Robin Alex Panicker, co-founder, Finotes Inc, who compiled the data.
“Startups in Kerala are doing fairly well. Nationally, the sector is performing extremely well. Many startups are raising funds through venture capital and angel funding. Recently, a Kerala startup named Open raised $100 million. However, there is still room for improvement. Kerala Startup Mission is encouraging many youngsters to come with startups. The Mission has a dedicated team to boost the start-up ecosystem in the state,” said John M Thomas, CEO of Kerala IT parks and Kerala Startup Mission.