THIRUVANANTHAPURAM: Amid the general economic downturn caused by the pandemic, the startup ecosystem in the state, comprising IT and biotechnology firms, seems to have bucked the trend. According to the data compiled by an IT expert, 18 startups in the state have raised $112.86 million (approximately Rs 853 crore) in six months — between January 1 and June 30 — through 18 deals. This is the highest amount raised by startups in state in the past 10 years. In contrast, startups had raised only $53 million last year in 25 deals. The latest trend also gives inspiration to many to come up with new ideas, thereby setting up new startups, industry observers said.
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. A majority of these firms, which inked such successful deals this year, is SaaS (Software as a Service) based startups and received investments from angel investors and private equities.
Of the 18 that received funding, 15 are SaaS-based startups and sell their products globally, though they are based in Kerala. Of the 18 startups, 10 are in Kochi, while seven are headquartered in Thiruvananthapuram. As per the data, Thiruvananthapuram- based startups raised $90.5 million (approximately Rs 669 crore). Outside tier I cities, Thiruvananthapuram attracted the maximum funding in India, said Robin Alex Panicker, founder of Finotes, and Venture Partner at Unicorn India Ventures, who compiled the data.
‘Investment shows untapped potential of startup ecosystem’
“Kerala is a smaller startup ecosystem compared to the likes of Bengaluru. We need to understand these numbers based on this fact. So I consider this growth as pretty impressive. But this also conveys the huge untapped potential of the Kerala Startup ecosystem, especially SaaS space. We have to run faster,” Robin said. “I will also like to mention that this data is collected from my network in Kerala Startup ecosystem, and this should not be considered as official data of any kind.
There could be funding deals that I may have missed out, and the actual numbers could be even higher. Consider this to be more indicative in nature,” he said. Recently, Chief Minister Pinarayi Vijayan assured that major investment and more employment opportunities will be created in the next five years as Kerala is the most progressive state in the startup sector. Last year, Kerala was declared the top performer for startups in the country for the second year in a row.
The state shared the honours with Karnataka, while Gujarat was declared the ‘best performer’ in the Centre’s States’ Startup Ranking 2019 released last year. Ashok Kurian Panjirkkaran, Business development and Incubation head, Kerala Startup Mission, said startups in the state have registered an impressive growth. He forecast AN upward trend in the coming years also.
“Kerala has 51% of startups generating good revenue and this positive trend will definitely bring in more investments. investors also can get connected with more startups with a scalable solution. The pandemic did not affect the startups’ operations,” he said.