[Startup Bharat] How Kerala Startup Mission is working to create an ecosystem from school to enterprise level

Kerala’s neighbouring states – Karnataka, Andhra Pradesh, and Telangana – are known for their booming entrepreneurial ecosystems. Abundant in man power and industries, the whole environment is extremely startup friendly in all three states.

The God’s Own Country, on the other hand, is mostly dominated by tourism, handloom, handicraft, bamboo, and cashew industries. But the state is now moving from being a scenic destination with serene beaches and tall coconut trees to an emerging startup hub. And the Kerala Startup Mission (KSUM), the central agency of the Government of Kerala for entrepreneurship development and incubation activities in the state, is fuelling the budding startup ecosystem.

Saji Gopinath, CEO of KSUM, got into a candid conversation with YourStory to reveal what it takes to help grow the Kerala startup ecosystem and the emerging trends in God’s Own Country.

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Edited experts from the interview:

YourStory: How does KSUM help startups and entrepreneurs here?

Saji Gopinath: KSUM offers help at two different stages – at the school and college level, and also once the startup is already formed.

Being a state where there are no high investor activities and only a few industries, we need to have a ground-up model. We believe that a startup needs a non-linear but impactful growth.

People have to think in an innovative way. We have something called an Innovator’s Programme. We distribute electronic kits and Raspberry Pi kits in schools so that students can start working on these. This initiative is undertaken by another agency under the education department. The agency now provides kits to 50,000 students across schools in the state, so that children start experimenting from an early stage.

However, the more serious work begins in college. We work with science, technology, and engineering colleges where we have set up ‘Innovation and Entrepreneurship Developing Cells’. It’s almost like an National Service Scheme (NSS) activity – we shortlist colleges and provide Rs 2 lakh to run entrepreneurship programmes and conduct innovation programmes. If colleges perform well and there are a lot of student entrepreneurs coming out of these colleges, we offer up to Rs 10 lakh. In fact, one of the products developed by college students here was sold to Lockheed Martin.

So, this is more like a learning programme, and 90 percent of the time, students will be experimenting. And if we find some of them serious about their experimentation, we provide them with infrastructure support.

YS: How do you help startups once they are formed?

SG: Every two months, we have something called an ‘Idea Day’ when any college student with a business idea can come up and pitch their idea to a panel. If the panel finds the idea interesting and viable, we provide them funds worth up to Rs 10 lakh. So far, some 2,800 ideas must have been pitched, and we have funded about 500 of them.

We have created not just physical infrastructure but also infrastructure for digital fabrication. We provide tab-labs, AR-VR, and blockchain networks and space for innovation.

We also provide soft loans at five percent interest. In addition to that, we have selected a few angels and have created a fund of funds. So, in a sense, we are trying to curate this ecosystem right from schools to enterprise level.

YS: What can startups from metros learn from those in Tier II and III cities?

SG: I won’t say learn, but startups in the metros can do a few things differently.

Metro startups are mostly concerned about valuation. Non-metro startups, on the other hand, are more about profit. Now, the challenge is that when you make profit, you are not necessarily investable – because it means you’re not really getting the customer base, but trying to make an early profit.

They fight to get an early breakeven, which means scalability is a challenge for them.

But, at the same time, the whole valuation game also comes with challenges. There have been cases where the expected valuation bubble has actually gone and burst at some point.

YS: What qualities do you look for in startup founders?

SG: We believe that the tech world needs a techie. So, the founder must have some background in tech. It doesn’t mean s/he has to be an engineer. I have seen some of the best startups being founded by doctors.

Startup founders have to be good at their work and they must be passionate. As a state, although we are promoting more student startups, we believe that experience matters.

YS: Do you prefer single founders or multiple founders?

SG: A startup is all about fast growth. One person cannot be great in all aspects. We have also found that investors generally look for multiple founders.

There have been cases where we have had single founders, but we try and help them find another founder and nurture these co-founders.

YS: Any particular trends that you notice in the Kerala startup ecosystem?

SG: We have more hardware startups. That’s probably because hardware startups are stickier, and software startups find it easy to migrate. We provide an environment that supports hardware startups; we have a hardware incubator. Fintech is also quite popular. Ecommerce is not as relevant.

There are a few healthtech startups as well, but not as many edtech startups.

I believe for edtech it’s a long runway and it requires a lot of financial support. Investment cycle of angel funds is shorter and they want exits in six years; and edtech might not become viable in six years.

YS: According to you, what are the top five startups from Kerala?

SG: I would say GenRobotics (they have built remote-controlled robot that can be sent down a manhole to remove sewage), Sastra Robotics (Uses robotic technology for a wide range of industry applications), Rapidor (A B2B platform that helps in sales order management, inventory control and business dashboards), and Neuroplex (developed AI-powered video content analysis modules to enhance security at petrol pumps).

(Edited by Teja Lele Desai)

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