Institution of a State-level Fund of Funds (FoF) has been proposed as one of many measures that might be adopted by the Karnataka authorities to additional enhance the thriving start-up ecosystem within the state .
The proposal was made in a report titled ‘Karnataka Decade: Roadmap to a $1 Trillion Financial system’ ready by the Division of Planning, Program Monitoring and Statistics and the Federation of Chambers of Commerce and Business. of Indian business.
The report analyzes a number of sectors, together with agriculture, manufacturing, know-how, start-ups, tourism, well being and schooling, amongst others, and suggests measures that would assist the state implement creates a trillion greenback financial system.
Unicorn Sizzling Spot
India is the third largest startup base on the planet and Bangalore constitutes round 40% of the Indian startup ecosystem. House to 45 of India’s 105 unicorns, town is the most important unicorn hotspot in India, the report notes.
With a thriving start-up base, the nation has additionally witnessed a wholesome personal funding ecosystem that constitutes over 250 accelerators and incubators, over 500 institutional buyers and over 2,000 energetic buyers.
In Bengaluru alone, in FY2021, 551 offers have been concluded, throughout which startups raised a cumulative quantity of $21.3 billion. “This represented virtually half of India’s complete of $49 billion,” the report factors out.
“Additionally it is dwelling to the most important variety of enterprise capital funds in India, forward of each the nationwide capital, Delhi, and the monetary capital, Mumbai. This makes it the undisputed innovation capital of India,” the report reads.
Nevertheless, he additionally notes that Indian capital represents solely a small portion of investments within the nation.
“Overseas giants are more and more making the most of India’s exponential progress. It’s estimated that solely 10% of complete incoming capital is home. With international gamers proudly owning most of India’s information and platforms, there may be an pressing have to inject extra home capital into the system. That is the place governments like that of Karnataka could make a major affect,” he says.
As an answer, the report proposes the creation of a FoF of ₹5,000 crore and means that this might be an vital step in encouraging the ecosystem. “An FoF of ₹5,000 crore might present a robust basis for the expansion of Indian start-ups,” it says.
The report additionally suggests a couple of focus areas for FoF together with startups in sectors akin to fintech, IT, enterprise know-how, deep science startups in healthcare, water, agriculture, semiconductor and different fields, in addition to the startup of logistics and provide chain. -UPS.
“Karnataka has a wealthy historical past of supporting entrepreneurship. The Karnataka State Monetary Company has contributed to the expansion of world giants akin to Infosys, Biocon and MTR Meals. This might be a helpful mannequin for the state to re-adopt, offering interest-free or low-interest loans and FoF grants to assist speed up the start-up ecosystem,” the report stated.
Karnataka, the primary state to give you a devoted startup coverage in 2015, at the moment has over 15,000 startups. The state has topped the NITI Aayog’s India Innovation Index yearly since 2019.