Innovation grants serve as the first tranche of seed capital for product startups
An amount to the tune of Rs 25 crore has been provided as innovation grants to range of technology and product startups, since 2017, by the Kerala Startup Mission (KSUM). This has resulted in laying a firm foundation for a robust startup ecosystem, thus enabling a variety of ventures to flourish. Kerala Startup Mission is the nodal agency of the Kerala government for entrepreneurship development and incubation activities in the state.
The innovation grants serve as the first tranche of seed capital for a product startup in Kerala, which intends to pursue an innovative technology idea and translate it into a full-fledged venture.
Over the past five years, KSUM has scouted more than 8,000 innovative ideas from tech startups, including student startups. Among them, 2,000 startups made their final pitches through 23 Idea days and a total of 550 innovations won KSUM innovation grants.
Of the total amount of over Rs 25 crore sanctioned as Innovation Grants, around Rs 17crore has already been distributed to startups through various schemes like Idea Grant, Productization Grant, Scale-Up Grant, Women Productization Grant and Startup Research (R & D) Grants.
Innovation grants pave way for startup ideas to blossom
Despite disruptions caused by the Covid-19 pandemic, KSUM maintained the tempo of supporting startups by sanctioning a total of Rs 689.15 lakh as grant to 170 startups in 2021-22 in different categories, which was the highest for a Financial Year, which included Student Idea Grants. Of the amount sanctioned as a grant, Rs 347.42 lakh was released as an initial tranche.
KSUM CEO John M Thomas said these initial rounds of funding have served as the core capital for a large number of startups to set up their ventures, most of which have turned into success stories in due course by benefiting from venture capital funds. According to him startups have been provided funds in the form of Venture Capital and Angel Funds. As the state’s nodal agency for startups, KSUM has been able to sustain the momentum of funding despite various challenges on the way, including the Covid-19 pandemic.
During last financial year, more than 620 startups applied for KSUM’s innovation grant and 515 of them were shortlisted for pitching. The selected startups then pitched their ideas before 55 evaluation panels in online mode. The three-month-long evaluation process was concluded in February this year.
The panels selected around 102 startups and 68 Students Ideas for providing funding. Scaleup Grant was given to 17 startups, Productization Grant went to 40 startups, Idea Grant Innovator extended to 31 startups, Women Productization Grant was given to nine startups and Startup Research Grant provided for five startups.
Innovation Grant is a critical validation of a product or technology, its scalability and prospective investability. KSUM has been providing opportunities to more startups to pitch their innovation, thereby enhancing their initial efforts to identify potential entrepreneurs and encouraging the overall ecosystem,” according to Surya Thankam, Manager- Innovation Financing, KSUM.
‘Fail Fast or Succeed’ programme improves outcome
Kerala is supporting technology startups with Innovation Grant worth Rs 30 lakh and seed loans worth Rs 15 lakh. The innovation grant will be augmented along with KSUM’s FFS (Fail Fast or Succeed) Incubation programme for improving outcome.
Besides the Innovation Grant, KSUM disbursed seed loans of Rs1.5 crore to 18 product startups, including women entrepreneurs, this year. During the year, KSUM also won the Startup India Seed Loan Scheme by the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, and NIDHI Seed Loan Scheme by the Department of Science and Technology (DST), Government of India.
Apart from KSUM, the startup loans are being provided by Kerala Financial Corporation (KFC), Kerala State Industrial Development Corporation Ltd (KSIDC), MSME/District Industries Centre (DIC) and Scheduled Caste Development Department (SCDD). KSUM is also providing grants under DST NIDHI PRAYAS, Patent Support System for all categories, technology transfer and commercialization grants, specifically for women to encourage the Intellectual Property rights, technology transfers and licensing, said a startup mission source.
Startups securing Innovation Grants and loans can also raise external investments both from Kerala and other Indian states. The international expos and opportunities being given for startups, the Angel Investment, Fund of Fund Schemes and Corporate Innovation Networks by KSUM are also empowering them to globally raise various investments, including VC Funds.