CHENNAI: Tamil Nadu became the first state in the country to make equity investments in startups as Chief Minister MK Stalin on Friday ordered investments of Rs 7.5 crore in five startups founded and managed by entrepreneurs from Scheduled Caste/Scheduled Tribe (SC/ST) communities.
The investments, done through the Tamil Nadu SC/ST Startup Fund under Tamil Nadu Startup and Innovation Mission (StartupTN), will make the state government a shareholder in these companies.
The five startups are Unibose Technology Pvt. Ltd. (Rs 2.5 crore), which helps develop and build robots for cleaning vessels to store hazardous materials in oil and gas industry and sewer lines; Pack N Back Solutions Pvt. Ltd (Rs 2 crore), which optimises and digitises logistics in supply chain for automobile, agriculture and e-commerce industries; Ywe Auto Assist India Pvt. Ltd. (TowMan) (Rs 1 crore), a unique subscription-based roadside assistance for two-wheelers and four-wheelers; PEAS Automation Technologies Pvt. Ltd. (Rs 1 crore) involved in building portable multi-agro processing units in primary processing segment for small and medium farmers by integrating Industry 4.0 concepts; and Eco Soft Zolutions Private Limited (Rs 1 crore), which digitises invoicing processes including logistics and compliances by integrating suppliers and original equipment manufacturers for small and medium enterprises.
The state had earmarked Rs 30 crore in the 2022-23 budget for Tamil Nadu SC/ST Startup Fund, an equity and debt fund. The scheme has attracted 330 applications since May 2022. Equity investment by the state government gives more credibility to these startups and it will help them acquire new clients and reach new markets. StartupTN will also provide mentoring and post-investment support that will help them achieve their goals and milestones more efficiently and effectively.
Initiative aims to encourage SC/STs to promote startups
The fund will help Unibose complete the development of its product lines and commercialise them in the market. Similarly, equity infusion will help PacknBack to create a Track and Trace logistics platform to track containers by embedding RFID tags and help turn it into a digital supply chain management company. While the funding may help Tow- Man get access to corporate clients and expand its market operations across Tamil Nadu, PEAS can move from being a service company to a product company and specialise in primary food processing domain.
Similarly, Eco Soft will be helped to pivot from a software services provider to a SaaS product provider in the automotive domain, eventually becoming a fintech solutions provider, sources said. The initiative is aimed at churning out inspirational stories that would spur the creation of more startups by SC/ST entrepreneurs to build inclusive mass entrepreneurship across demographics and sectors.
Preliminary shortlisting of applications was carried out by StartupTN with the support of experts, followed by due diligence, interviews and mentoring of founders. A project sanctions committee, after detailed evaluation, approved the startup funding in the form of Compulsorily Convertible Debentures (CCD). The event at the secretariat was held in the presence of Minister TM Anbarasan; Palanivel Thiaga Rajan; Dr V Irai Anbu; MSME secretary V Arun Roy; additional chief secretary of finance department N Muruganandam among others.