Deeptech boom has driven Karnataka startups past $300 bn mark: Kharge

The Karnataka IT minister said deep-tech startups in semiconductors, biotechnology and space tech continue to attract higher investor interest and funding

The overall valuation of Karnataka-based startups has crossed more than $300 billion, even as venture capitalists, angel investors and other investors have turned their focus to deep-tech companies working in the space of semiconductors, biotechnology, and space tech, among others, Karnataka’s information technology minister Priyank Kharge said.

 

Speaking to Business Standard during his visit to the city to promote the 29th edition of the Bengaluru Tech Summit, Kharge said that though other regions and states had been showing higher startup registrations, the overall money flowing into the startups of Karnataka remained much more than the other states.

 

“The number of deep-tech startups that have been funded in India is the highest in Karnataka. The average funding for each of such startups is between $2 million to $3 million. The VCs (venture capitalists) will invest where they find value,” Kharge told Business Standard.

 

Apart from pure-play deep tech startups, about 32 per cent startups in the e-commerce, healthcare, and other sectors have also been leveraging better technology, leading to an overall improved ecosystem, he said, adding that the state government had taken a conscious decision to focus on deep tech startups for the next decade.

 

“The idea is not to build or have innovations and inventions that a few people like but to have ideas that are useful to a lot of people. If they are solving a problem for the government or the society, that is something we will focus on heavily,” he said.

 

For example, the state government is running very-large scale integration (VLSI) models for semiconductor upskilling and re-skilling with help of companies and startups working in these areas, he said.

 

Apart from startups, the state government is also providing financial and non-financial incentives to companies and startups that are looking to set up operations in cities outside of the capital city of Bengaluru, Kharge said.

 

Even though a decongestion of Bengaluru will take time, Kharge is hopeful that the policy will have long-term positive impact as one third of the 30-35 companies that operate Global Capability Centres (GCC) in the state have opted to shift outside the capital city. The idea behind the policy was to drive investment where the talent is, rather than bringing the talent to where investment has already been made or will be made, he said.

 

To ensure the policy continues to work well, the government will focus on non-fiscal incentives, such as building more Grade A buildings and social infrastructure in towns and cities neighbouring Bengaluru, Kharge said.

 

“The government needs to take that leap of faith, like when the Electronics City was built, which had no information technology parks initially. Today, it is the most dense talent pool in the world as nearly 800,000 engineers work out of that nine kilometer stretch,” he said.