In a move to give a fillip to the startup ecosystem in Kerala, the government has proposed to create a Venture Capital (VC) Fund with a corpus of Rs.100 crore. The announcement was made by the State Finance minister KN Balagopal in Kerala Legislative Assembly during his first Budget Speech.
“It is proposed to set up a Venture Capital Fund with a corpus of Rs.100 crore to activate the rapid growth of small-scale enterprises and start-ups,” said Mr. K N Balgopal.
The government has also earmarked an amount of Rs.1 crore as an initial expense to set up the fund.
“This fund would help the fast-growing technical and non-technical enterprises with potential for rapid growth,” added the minister.
According to the State Of Kerala Startup Ecosystem 2019 report, done by DataLabs by Inc42 there are around 2,200 startups in the State. Further, the report said 13 startups received funding worth $44 million in 2019.
The new fund would be mobilized through the participation of Kerala Financial Corporation (KFC), Kerala State Industrial Development Corporation Ltd(KSIDC), Kerala State Financial Enterprises Limited (KSFE), Kerala State Co-operative Bank, Commercial Banks, and the deposits of Non-Resident Keralites (NRK).
The government also plans to set up an experienced professional management team will be to manage the fund. An amount of Rs.1 crore is earmarked to set up this fund for meeting the initial expenses.
Earlier, the State had introduced a Seed Support scheme to provide financial assistance to startups to foster the formation and development of innovative, technology-based business enterprises in Kerala through venture creations, increased employment and leveraging of private investment.
The Kerala Startup Mission is also partnering with SEBI accredited Venture Capital Funds for the creation of a corpus fund for supporting the emerging startups in the state. The Funds shall be investing in early-stage startups with a ticket size of Rs. 25 Lakhs – Rs. 2 Crore.