KOCHI : Kerala’s startup ecosystem is in for a paradigm shift with the state government looking to take equity in companies it provides seed investment, which is now in the form of grants or or soft loans. The move comes as net equity investment by the Kerala Startup Mission (KSUM)-backed Fund of Funds (FoF) in the state has crossed Rs 100 crore.
Since 2016, KSUM has provided financial support of nearly Rs 24.4 crore to 638 startups and Rs 11.3 crore in seed loans to 151 startups, according to data available with TNIE. It provides a maximum grant of Rs 15 lakh to each startup.
Going forward, the plan is to take equity in startups receiving KSUM’s financial support. “We started providing financial support to startups in 2016 to develop the ecosystem, to enable people to venture into new things. We believe the ecosystem has now taken shape,” Anoop Ambika, CEO of KSUM, told TNIE.
“It will still be a grant but we will ask for equity against this money, and it will not be a loan. We have agreed to this in principle,” he said, adding the finer details are being worked out.
Besides seed investment, KSUM accounted for Rs 46.14 crore of the FoF’s net investment of Rs 100.47 crore across 19 Kerala startups. The mission assumes the role of a limited partner in the FoF. The funds KSUM has partnered to invest in state-based startups include Unicorn India Venture Fund I, Salamander Excubator Angel Fund, Indian Angel Network Fund I, Speciale Invest Fund I, and Unicorn India Venture Fund II.
Some of the major startups that have received FoF investment include Genrobotic Innovations, Open Financial Technologies, BestDoc Technology, Finsall, Inntot, Fedo Health, Sascan Meditech, PerfectFit Systems and Astrek Innovations.
State-focused PE fund
Meanwhile, the state government through Kerala Infrastructure Investment Fund Board (KIIFB) is coming up with a Kerala Innovation Fund (KIF), a Kerala-focused private equity fund. KIF will be a state-sponsored VC fund registered with the Securities and Exchange Board of India (Sebi). “KIF seeks to identify, create, and invest in quality infrastruc-ture opportunities in Kerala that will power economic activity and improve the quality of life,” a filing said.
Mission-Critical Activity
Rs 24.4 cr
KSUM’s financial support since 2016 to 638 startups
Rs 11.3 cr | Seeds loans to 151 startups over same period
Rs 46.14 cr | Total investment in Kerala startups via Fund of Funds (FoF)
Rs 100.47 cr | Net investment by FoF in state-based startups
Some startups that have received FoF funding:
Genrobotic, Open Financial Technologies, BestDoc Technology, Finsall, Inntot, Fedo Health, Sascan Meditech, PerfectFit and Astrek Innovations