Decoding Karnataka’s Multi-Sector Startup Policy

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Bangalore is often referred to as the Silicon Valley of India and rightfully so. Did you know that the city houses roughly 212 software companies? Now, that’s quite a feat! Bangalore also has the highest percentage of engineers in the world. Yes, you heard that right, in the world! Keeping these facts in mind, there’s no surprise why Bangalore is such a hotbed for entrepreneurs and startups. Given the surge in the number of startups popping up all across the country, Bangalore is bang in the centre of the all the action, no pun intended.

The Government has launched a startup policy from 2015-2020 which aims to create a world-class startup ecosystem through strategic investment and policy interventions, leveraging the robust innovation climate in Bangalore.

This policy through a variety of ways (which we will go through in this article), aims to provide legs to the many startups coming up in Bangalore specifically and in Karnataka in general. Let’s take a closer look at how the startup policy will manifest itself in this environment.

  1. New Age Incubation Network

This benefit targets:

  • Engineering Colleges
  • Professional and Post Graduate Institutions in tier-two cities.

What exactly is the benefit:

  • Grants to support Op-ex in college incubators
  • Get upto 3 lakhs per project as Annual Financial Support
  • Upto 10 projects per college
  • Training for faculty and students
  • Internship Stipends
  • Exposure to international startup destinations, networking events etc

How the benefit is administered: Through an annual call for selection of new colleges.

2. Technology Business Incubators

This benefit targets:

Institutes of higher learning with well-developed research and development facilities to foster strong links between R&D and Commercialization of Technologies.

What exactly is the benefit:

The state support would be for the initial capital cost for equipment, facilities and recurring costs of management of TBI for 3 years, which is extendable by another 2 years.

How the benefit is administered:

  • The proposal must be submitted by an eligible academic institution that has adequate expertise and infrastructure to support the TBI.
  • The TBI must be a registered Trust/Society/Section 8 Company to avail the incentive.
  • The Host Institution is to provide land and built up space for the creation of a TBI.
3. Idea to Proof of Concept Funding

Who the incentive targets:

The scheme enables technology innovators and entrepreneurs to pursue a promising technology idea and validate proof of concept (POC).

What is the incentive:

  • The state support would be in the form of a grant-in-aid.
  • The funding will be released in installments against agreed milestones.
  • The funding level is up to 50 Lakhs.

How the incentive is administered:

  • A biannual call for proposals to be made for selection.
  • Selection through the state level screening committee.
  • Selected implementation partners to help the Government of Karnataka with the implementation and periodic monitoring and review.
4. Creating Incubation Infrastructure

Who the benefit targets:

The state will invite globally well known accelerators and incubators to set up world class incubation centres, accelerators or expand existing facilities on a PPP basis.

What exactly is the benefit :

The centre must provide facilities like R&D labs, common centre for prototyping, common testing/QA/QC labs, design studios and tool rooms, fab labs, biotech wet labs, green houses animal houses, infrastructure support, mentor and investment connects, legal and accounting services.

How the benefit is administered:

Either through the partner RFPs or in partnership with industry associations.

6. Startup Fund of Funds

Who the benefit targets:

A fund of funds will be allocated for investing in venture funds that invest in startups in various sectors. A portion of the fund of funds shall be utilised for angel stage funding.

What is the benefit :

Mobilizing Rs. 2000 Crores of funding for investments into startups through Government intervention alone.

How the benefit is administered:

  • Selection of fund manager to operate and mobilize funds.
  • Investment committee with experts from Government, academia and industry.
  • Investment in venture funds with credible background in operating technology sectors.
7. Channelizing Innovation for Social Impact

Who the benefit targets:

This grand challenge is for entrepreneurs with workable and scalable solutions to challenges faced by society.

What is the benefit :

  • The winners of the grand challenge will be awarded an initial and follow on funding.
  • Winners will be assisted to implement their pilots.
  • Winners will automatically qualify for incubation space on a preferential basis.

How  the benefit is administered:

  • Five grand challenges per year.
  • Selection committee to identify challenges having social and governance impact.
  • Selection through open competition.
7. Incentives and Concessions

Once registered under the KSUC your startup shall be eligible for the following incentives:

  • Self-certifications for various statutory permissions
  • VAT/ CST/ ST exemptions
  • Reimbursements of patents spends
  • Reimbursements of marketing spends
  • Subsidized seats in Govt. supported incubators
  • A better deal for women entrepreneurs in incubators
  • Access to idea to a POC Funding
  • Participate in Govt. sponsored exposure visits
  • Make a difference through “Grand Challenges”
  • Avail funding under the Government of Karnataka’s fund of funds
  • Other incentives under the Government of Karnataka policies
How do you know whether you’re a Karnataka startup?

You are a Karnataka startup if:

  • Yours is a Technology based startup
  • Your revenues are clocking under 50 Cr
  • Your company/entity is not older than 4 years if you are an IT-based company and 7 years if you are a BT startup
  • More than 50% of your qualified workforce is in Karnataka
  • You are not excluded under the other exclusion principles under the policy

This is everything that comprises the Government of Karnataka’s startup policy 2015-2020. For any more information contact the Karnataka Startup Cell at: 

We also have a few seats left in our Bangalore Scholarship Program which involves a subsidised price for Bangalore-based tech startups who qualify for the program. So, don’t waste any more time and apply here

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