K'taka govt giving film stars, family offices, HNIs opportunity to invest in ₹100 crore startup fund [details]

The startups are making it big in India. We have already seen 10 startups join the unicorn club with $1 billion+ valuation this year alone, adding to the 100 other unicorns the India harbours. Of all the cities in the country, Bengaluru had the highest number of unicorns, according to a Credit Suisse report. Naturally, Bengaluru is living up to its namesake of Silicon Valley of India. To bolster budding startups further, the state government is setting up a Startup Fund that will help investors scale up their ideas.

During the March budget, the Karnataka government had announced a Rs 100 crore startup fund. The government committed Rs 25 crore as its share for the fund, which leaves a deficit of Rs 75 crore for the startup fund. According to ET report citing a senior government official, the state government will likely rope in family offices, film stars and high-net-worth individuals (HNIs) for its startup fund.

Karnataka Startup Fund

Karnataka CM BS Yediyurappa had announced back in March that it would set up a new Rs 100 crore venture capital fund to support startups and strengthen Karnataka's dominance in the field of innovation. For this, the state government said it would provide Rs 25 crore and encourage private insinuations and companies to contribute the remaining Rs 75 crore.

The IT/BT department additional chief secretary EV Ramana Reddy had said that the startup fund will be sector-agnostic and will invest in startups that show potential to scale up, ET reported. He further expressed confidence that private investors will back the new fund given the impressive performance of their operational funds.

Once the requisite database is ready, the government will start inviting startups for early-stage investments. The state usually funds Rs 2.5-Rs 3 crore in equity support for shortlisted startups.

The state government has shown keen interest in budding startups and ways to support them. In an attempt to attract investors, both domestic and foreign, with government implemented several reforms including new IT policy in 2019.

Bengaluru has been ranked the world's fastest growing tech hub and funding in the last five years in Karnataka's capital has grown 5.4 times in the last five years, data has shown. From 2014 to 2020, of all the funding deals for startups in India, Bengaluru accounted for the highest with 33 percent. There was a total of $24 million funding across 1,700 deals, Inc42 reported.