Kerala Startups Raised $112.86 Million in Past Six Months
Despite this pessimistic outlook, the Indian startups ecosystem has weathered these challenges rather well. These startups are exploding in size and setting a good example for other businesses on how to deal with and survive the lockdown. Rising numbers of new startups, entrepreneurs, and venture capitalists in India are accelerating the growth of the top technology-driven startup scene.According to a KPMG report on India's startup ecosystem, the number of startups has increased from 7,000 in 2008 to 50,000 by 2020.
The southern state of Kerala and its startup ecosystem, which includes IT and biotechnology firms, appears to have bucked the trend. Data compiled by experts concludes that 18 startups in the state raised $112.86 million (approximately Rs 853 crore) in six months — between January 1 and June 30 — through 18 deals.
In the past 10 years, this is the highest amount raised by startups. But there was a dip in last year, startups had raised only $53 million in 25 deals. Industry observers say that the latest trend also inspires many to come up with new ideas, resulting in the establishment of new startups.
The data is based on the performance of businesses that have been in operation for less than ten years. According to data from the Kerala Startup Mission, there are currently around 2,900 startups operating in the state. Kerala Startup Mission which is Kerala Government’s central agency for entrepreneurship development and incubation activities in Kerala was founded primarily to plan, establish, and manage the Technology Business Incubator, a startup accelerator in Kerala, to promote technology-based entrepreneurship, and to create the infrastructure and environment needed to support high-technology-based businesses.
The majority of these companies that have signed such successful deals this year are SaaS (Software as a Service) startups that have received investments from angel investors and private equity.
SaaS startups are in high demand these days because of its benefits like cost saving, mobility, IT expertise, scalability and fewer update efforts. Currently, more than 38% of businesses rely entirely on SaaS. Experts predict that in the coming years, that figure will rise to 75%, with the SaaS market reaching $76 billion.
15 of the 18 startups that received funding are SaaS-based and sell their products globally, despite being based in Kerala. Ten of the 18 startups are based in Kochi, with the remaining seven in Thiruvananthapuram. According to the data, startups based in Thiruvananthapuram raised $90.5 million (approximately Rs 669 crore). Outside of Tier I cities, Thiruvananthapuram received the most funding in India, according to the data's compiler, Robin Alex Panicker, founder of Finotes and Venture Partner at Unicorn India Ventures.
SurveySparrow-that builds tools to create engaging survey experiences, Mitsogo- that provides unified endpoint management, Carestack- cloud platform that provides dental practice management solutions, Hyreo-NLP and chatbot-driven recruitment platform, Rybbon-online platform that helps marketers to run and manage e-gift campaigns, are the top SaaS startups from Kerala.
“Kerala is a smaller startup ecosystem compared to the likes of Bengaluru. We need to understand these numbers based on this fact. So I consider this growth as pretty impressive. But this also conveys the huge untapped potential of the Kerala Startup ecosystem, especially SaaS space. We have to run faster,” Robin said. “I will also like to mention that this data is collected from my network in Kerala Startup ecosystem, and this should not be considered as official data of any kind. There could be funding deals that I may have missed out, and the actual numbers could be even higher. Consider this to be more indicative in nature.”
As Kerala is the most progressive state in the startup sector, Chief Minister PinarayiVijayan recently assured that major investment and more job opportunities will be created in the next five years. Kerala was named the top startup performer in the country for the second year in a row last year.
The state was tied for first place with Karnataka, while Gujarat was named the ‘best performer' in the Centre's States' Startup Ranking 2019 released last year. Ashok Kurian Panjirkkaran Business Development and Incubation Head, Kerala Startup Mission predicts an upward trend in the coming years following the present impressive startup growth in the state.
Kerala has 51% of startups generating good revenue, and this positive trend will undoubtedly attract more investment. With a scalable solution, investors can also connect with more startups. The pandemic had no effect on the operations of the startups.
Many Indian startups are collaborating closely with authorities at the central, state, and district levels to help the people of the country and strengthen the monitoring system through tech-enabled innovations. During the COVID-19 pandemic, each state is dealing with its own set of issues. As we saw in the case of Kerala and other states in the early weeks of the COVID-19 pandemic, many of them have turned to startups for solutions.