For those asking if the government is doing enough for startups, the Startup Conclave, organised by the CII Southern Region in Chennai, provided an answer, at least from the state government’s point of view.
Dharmendra Pratap Yadav, MSME Secretary, Tamil Nadu, in his inaugural address revealed several initiatives by the Tamil Nadu government towards nurturing startups. As part of the broader approach to the startup activity, the State government provides training, funding and many other forms of support to the startups.
Yadav said, about 10 colleges in Tamil Nadu have startup incubators who have been provided funding of Rs 10 crore each by the state government. He also said a startup policy of the Tamil Nadu government is also on the anvil. The policy is now in the draft stage, open for discussions and suggestions. Yadav added the startup policy aims to provide special focus on students in educational institutions to help them prosper as self-employed and employers in future.
One of the highlights of the government’s startup initiative is that it is focused across sectors such as agriculture, manufacturing and marine fisheries that have been the traditional strengths of the state. The state government has also set up its own incubator in biotechnology, Yadav revealed.
In a panel discussion that followed, R Sivarajah, the moderator of the session and the Co-founder of Native Leads Foundation, stressed the importance of the ecosystem for entrepreneurial development. He also explained how Native Leads, a forum, is fostering entrepreneurship in Madurai and Coimbatore.
RV Shajeevana, Additional Director of the Entrepreneurship Development and Innovation Institute (EDII), listed the Tamil Nadu Startup Programme taken up by the state government at the school and college level. He said ideation camps were being held at colleges. For an idea to take shape and become a viable startup, it takes eight months, said Shajeevana. Out of the 8,000 students who shared their ideas in the ideation camps, four ideas have reached the startup stage. This apart, the EDII has trained two lakh entrepreneurs, out of which 20,000 are students.
EDII’s Innovation programme provides 80 percent funding with a cap of Rs 2 lakh for early-stage startups born out of an innovative idea and at the mature stage, a funding of 50 percent with a cap of Rs 5 lakh is provided. Further, there is a proposal to allocate five percent of the space in industrial estates and Sipcot for startups to set up factories, Shajeevana added.
To help students coming up with innovative ideas, EDII provides support through Startup Step, where they can test out their idea before launching as a startup.
Shaji Gopinath, CEO of Kerala Startup Mission, said the state government is setting up an incubation facility in partnership with the Indian Space Research Organisation (ISRO) for startups in the space domain.
“Students can build nano-satellites here,” he said. Stating that the Kerala Startup Mission focuses on electronics, biotech, space and mobile applications, he said that stress is on generating IPs (Internet Protocols).
“So far, 25 patents have been registered,” he said. In Tier II cities, a fund was being set up in association with various venture capital funds worth Rs 100 crore. “The fund has been fully utilised,” he added.
Calling Andhra Pradesh a startup state, Winny Patro, CEO of Innovation Society and Additional CEO of IT Academy in the Andhra Pradesh government, said the Andhra government is extending its reach to niche startup destinations by setting up AP Pavilions in places such as Bengaluru, Mumbai, Tel Aviv and in the Silicon Valley so that any entrepreneur starting up in resource-scarce Andhra Pradesh can have access to resources and networking in the startup-active areas.
Suresh Sambandam, CEO of OrangeScape, listed the reasons why Chennai is called the SaaS hub of India. Suresh said that KiSSFLOW, the flagship product of OrangeScape, has reached 121 countries without any sales effort face-to-face.
Chennai-based SaaS companies generate $1 billion in revenue every year, out of which Zoho and Freshworks alone account for 60 percent of the revenues. In contrast, SaaS startups have raised only $500 million from investors.
Suresh added that SaaS companies in Chennai employ 10,000 people. He explained what makes SaaS work in Chennai is the flywheel effect of a community around SaaS helping and nurturing SaaS startups to grow.
Rahul Sasi, founder and CTO of Cloudsek, drew applause from the audience when he stated he dropped out of engineering to pursue an internship opportunity in an American tech company. As he was a dropout, he said he had to work twice as hard and demonstrate his success to prove that he is no less than an engineering graduate. He was the first employee of Cisco in Bengaluru and narrated how Cisco had to tweak its HR policy to hire him without an engineering degree. Now, he has established Cloudsek, a startup in the networking and security domain.
Let’s Venture’s Nagaraja Prakasam highlighted several innovative companies working quietly in Tier II and Tier III cities. They don’t get publicity or recognition as much as urban startups do. On an even keel, Tier II startups are likely to receive 25 percent less funding compared to an urban startup, he said. Thillai Rajan, Professor at IIT Madras, who has been publishing reports on startup activity in Tamil Nadu every year, said that the startup activity in Tier II and Tier III cities is increasing year after year. Funding is also showing an uptick in these cities, he added.
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