Kerala invites RFP from Alternative Investment Funds to boost startups

The Kerala government has invited a request for proposal (RPF) from alternative investment funds (AIFs) that are accredited by the Securities and Exchange Board of India (Sebi) to boost the start-up ecosystem in the state.

The state government will provide money to the selected AIFs under its Fund of Funds scheme to invest in start-ups, especially those using technological innovations.

The project is being managed by the Kerala Startup Mission, the nodal agency to promote innovation and entrepreneurship.

According to the RFP, the government will be a limited partner in these AIFs. The funds it provides will be limited to 25 per cent of the corpus of the AIF.

The state had earlier launched the Kerala Startup Corpus Fund, a first of its kind initiative, based on the Kerala Technology Startup Policy 2014.

A corpus of Rs 250 million was created with the support of two Sebi-registered AIFs — Unicorn Ventures India and SEA Fund. Of this, Rs 125 million was pooled in by the state government. An equal amount was provided by the AIFs.

Using the Kerala Startup Corpus Fund, seven investments have been made into Kerala-based start-ups. One of the start-ups funded was Genrobotics, which developed Bandicoot, a robotic system to clean sewers. They took only four months for this.

The success of the initial project has promoted the current one.

“The objective of the current RFP is to make an additional investment into eligible AIFs for supporting exclusively the emerging start-ups in the state through venture investments,” said Saji Gopinath, chief executive officer, KSUM.

Describing AIF investments as the largest source of capital for start-ups, he said these are necessary for these fledgling companies to achieve accelerated growth and help the state government achieve its goal of transforming Kerala as a hub for innovations.

More than 200 start-ups are currently working from KSUM’s five incubation facilities at Thiruvananthapuram, Kochi, Kozhikode, and Kasargod. In addition, over 200 start-ups are working from the incubation facilities set up by 20 incubators (both private and public) across the state.

Kerala also has about 1,500 mature startups working in emerging technology areas, serving markets across the globe through innovative products and services.