Kerala Startups In The Spotlight: Lessons From Nurturing Tech Innovation At The Grassroots

“Even at a time when startups were not even called startups, Kerala had some decent success stories to boast of. These were of companies such as IBS, SunTec and UST Global. They were the reason that the state attracted IT attention of the country. It is from here, I think, that you can truly see the Kerala startup ecosystem grow and progress,” – Robin Alex Panicker, venture partner, Unicorn India Ventures

Kerala has been recognised as one of the best states for startups in India for many reasons, and among those is the fact that it has constantly supported efforts to improve the pace of innovation, right from the grassroots level. Earning the top rank in the Human Development Index in India, Kerala has over the years started focussing on the tech startup ecosystem. With the setting up of KSUM (Kerala Startup Mission), the nodal agency for startups in the state, the government proved that it is serious about building a robust ecosystem that can measure up to the best in the world. Thanks to KSUM, many startups from Kerala got the necessary support to build and boost their operations.

Through KSUM, startups are not only getting incubation support but also mentorship, funds and grants at various stages of their life cycle. Besides this, the agency helps startups figure out the marketing and PR needs as well as any go-to-market strategies, through other businesses or through the government as a marketplace.

According to Kerala Startup Ecosystem report by DataLabs by Inc42, las year the state was home to over 1,500 startups, and this number grew to 2,200 in 2019.

So what has Kerala done to get startups started on their growth journey? How has Kerala promoted the entrepreneurial spirit? Here is a quick overview of the startup ecosystem in the state, including the enablers and a few success stories.

Enabling Startups At Multiple Levels

KSUM is the biggest enabler of the startups in Kerala, helping them in penetrating not only the domestic market but the international one as well. Some of the benefits that it is providing the startups to help them in going to the market with their ideas are:

• Seed Funding: Funds up to INR 10 Lakh are provided to innovative startups to boost their products and help them in early- stages of their journey.
• International Entrepreneurial Exchange Programme: With this KSUM targets mature startups to provide them experience and exposure to biggest tech ecosystems from around the world such as Silicon Valley, London, Tokyo, Tel Aviv and more. Startups are reimbursed by up to INR 1 Lakh per programme.
• R&D Grants: These grants are given to hardware startups with a significant R&D component. Each startup can get up to INR 30 Lakh — at least 50% of the grant must be spent on hardware, with not more than 20% on marketing expenses.
• Idea/Productisation/Scale-Up Grant: Startups also get idea grants at their idea, product and scale-up stages. For the same, KSUM gives up to INR 12 Lakh to the startups, depending on the stage of the startup.

The Success Stories Of Startups In Kerala

Kerala is home to several incubators, coworking spaces and more that are helping the startups in the state. KSUM also is proactively providing the startups with incubation facilities.

Incubators And Accelerators

• BioNest: Jointly run by Rajiv Gandhi Centre for Biotechnology (RGCB), under the aegis of Department of Biotechnology, Government of India and KSUM, BioNest provides infrastructure and scientific support to startups and entrepreneurs working in the field of biotechnology.
• Brinc: A Hong Kong-based hardware accelerator, Brinc was brought to India by KSUM to address the challenges faced by product and hardware development startups in the country. It helps startups understand the global hardware market and develop products accordingly.
• K-Accelerator: KSUM joined hands with Zone Startups India to roll out this programme to help startups get market validation for products, meet with relevant customer and industry leaders, and connect with potential investors.
• Hardware Accelerator: This 3 months programme is the first accelerator programme by BRINC launched in India. It provides comprehensive support to mid-stage startups that already have a working prototype and are ready to move to their design for manufacturing (DFM) phase.

Coworking Spaces

• B Hub: Not only does B Hub provide coworking spaces to businesses, investors, students, freelancers, but it also hosts workshops and business meetups and 24/7 access to its facilities for its occupants.
• Centre A: Located on MG Road in Kochi’s main business district, this coworking space provides fully equipped private offices, meeting rooms and virtual office solutions to suit the needs of different businesses. It enables organisations to set up new offices without any capital investment.
• Spacebar: The first coworking space in Calicut, Spacebar provides modern workspaces with facilities to enable new entrepreneurs to set up their businesses at a much faster pace.

Investor Community In Kerala

• Unicorn India Ventures: An early-stage technology-focussed venture fund, it has a presence in Delhi, Mumbai and more apart from Kerala. Investing in seed and early stages of tech startups across various industries, it supports them throughout their early life cycle with initial and follow-on investments. With experienced entrepreneurs in the investing team, it also provides startups with mentors and advisors to build success stories.
• Malabar Angels Network: The business division of Malabar Entrepreneurship Innovation Zone, Malabar Angel Network (MAN), is the first regional angel network in Kerala. Currently, it has over 50 members in its investments team. MAN works with the objective of nurturing and supporting local startups and in turn, creating an early-stage funding ecosystem in the state.

Investors And Mentors In The State

Some of the most prominent investors and mentors in Kerala taking the startup story one step further are:

• Robin Alex Panicker, venture partner, Unicorn India Ventures
• Anil Joshi, managing partner, Unicorn India Ventures
• Raveendranath Kamath, CFO, Next Education India
• Shilen Sagunan, chief executive, SS Consulting
• Babu Sivadasan, president, Envestnet Retirement Solutions

Startups Conveying The Kerala Ecosystem Success Story

Through this progressive ecosystem, many startups have taken off in Kerala. A few startups among the many that showcase the success story of the ecosystem in Kerala are:

• Yuva Pay: Founded in June 2016 by Prashanth B and Shankar B, this startup is working towards increasing the penetration of digital transactions in rural India. Taking into consideration the low bandwidth or patchy internet connectivity in rural areas, Yuva Pay has designed a platform that doesn’t need internet to make local payments. In case, the device has connectivity, it will work like any other payments app, but when there’s no connectivity, it encrypts and compresses the payments data, and then turns it into small packets that can be shared over a frequency.