The new normal will be highly beneficial for small, agile startups: Dr Saji Gopinath, CEO, Kerala Startup Mission

By Gairika Mitra

What are the current strategies taken by KSUM amid the pandemic to help out startups?
Kerala Startup Mission has adopted a four prong strategy to support startups in the time of Covid. The elements of strategy were:

Reducing operational cost : As indicated to enable startups to stay afloat during the crisis, it is necessary to reduce the costs. Hence all startups working in KSUM’s premises and in other government  incubation spaces were given full waiver of licence fee for a period of four months. Further, the government extended a six month moratorium of repayment of seed loans and waived off interest during this period. All this helped startups to conserve cash. Further, KSUM sourced productivity tools and distributed free of cost to startups to reduce their operational costs.

Preparing for growth : KSUM also did extensive handholding and expert mentoring during this period to help startups to fine tune their products, pivot the products to meet the short term demand and also to restructure their business model to excel in the new normal. Over 70 sessions were conducted free of cost to enable startups to effectively transform themselves.

Enhancing the resources : KSUM had also aggressively campaigned for and connected startups with new investor connects and potential funding sources. During this period around Rs 230 crore of investment came in around 20 startups and many more are on the anvil. The startups were also connected to banks for enhancing working capital limits and to avail fresh debt to plan the growth. The State Financial Corporation has developed schemes to support upto 10 crore of funding against purchase orders, Rs 5 crore of venture debt and and Rs 1 crore of low cost seed loan for companies working in SDG products. Additionally, KSUM had given small grants and collateral free seed loans to ensure resource availability. A single window portal, Startupmission.in, was formed to provide startups with all grant schemes and financing schemes available with various national and international agencies to support companies during Covid, at one place.

Enabling new business : To help startups recover from the crisis, Startup Mission also solicited new business opportunities for startups. Linking startups with large corporates, MSME, trade and commerce were some of them. A campaign Business4startups wherein startups showcase their products useful for various stakeholders was arranged to help startups get new business. Additionally the products to fight Covid needed by government departments were sourced from startups under direct procurement scheme. Many startups were able to pivot or develop new products to meet the burgeoning demand of health care products during the Covid time

All these measure helped startups to stay afloat and grow during the pandemic.

Could you share some unique measures taken by the tech startups that have been beneficial amid the pandemic?
While Covid-19 has slowed down growth in many sectors, it has also brought about several new opportunities in areas like healthtech, wellness, edutech, etc. Many startups have pivoted their products or used their technology prowess to develop solutions to capture this burgeoning market. For instance, a company which was in HVAC filter manufacture, has quickly pivoted its filtering technology to become the largest N95 mask manufacturing startup in Kerala while another electronic hardware startups has used their technology skills to develop deep tech sanitising machines. A robotic startup has quickly developed non supervised robot nurses to serve patients inside containment wards, which was hailed as one of the Covid innovations on international level.

Kerala has about 2,700 startups registered with Startup India (DPIIT). As an ecosystem developer, Startup Mission supports all the technology startups in Kerala, giving priority to product startups. Of these, around 300 startups operate from the spaces owned or supported by Kerala Startup Mission in different parts of the state. These startups work in various technology domains like edutech, fintech, medical tech,  clean tech, enterprise tech, etc.

Kerala also has a large number of hardware startups working in areas like robotics, IoT, UAV, wearables, electric vehicles, etc.  Maker Village, the country’s largest electronic incubator setup, in association with Ministry of Electronics and Information technology, hosts over 72 startups working in these areas. Startup Mission also supports Mobile10X accelerator of IAMAI focusing on mobile applications and startups working in IR4.0 technologies. Along with Rajiv Gandhi Centre for BioTechnology, Startup Mission has established a biotech incubator with around 30 startups working on research led biotech product development.

As an incubator, what is the form of technology that you bank upon the most?
Kerala Startup Mission is an end-to-end ecosystem developer for technology startups and incubations is one of the activities of the Startup Mission. We have established large incubators across Kerala by our own or in association with partners focusing on various technologies. These are:

• Technopark Technology Incubator at Trivandrum focusing on digital technologies which is sector agnostic
• Electronic Accelerator in Trivandrum focussing on Electronic hardware development along with CDAC Trivandrum
• Integrated Startup Complex at Kochi focussing on scaleup companies in various technology domains ranging from enterprise tech to fintech
• Bionest Kochi focussing on biotech startups developed in association with DBT, GoI and Rajiv Gandhi Centre for BioTechnology
• Maker Village focussing on IoT, robotics, UAV, EV startups developed in association with Ministry of Electronics and Information Technology, Government of India
• Malabar Innovation Zone focussing on startups involved in Digital Transformation technologies for conventional industries established in association with Department of Industries, Government of Kerala
• Open Innovation Zone, a small incubator set up in Kasaragod for incubating startups involved in development of rural technologies
• Incubator at Palakkad focussing on cleantech and edutech established in association with Department of Higher Education, Government of Kerala

Startups in these incubators work various technology domains ranging from biotech, IoT, IR4.0 technologies application in various functional domains.

How can we have more tech startups join the bandwagon?
Kerala Startup Mission provides two types of support for encouraging development of technology startups. By establishing innovation and entrepreneurship cells in over 225 technology higher education institutions, KSUM actively promotes technology startup culture among students. The students are provided with Maker spaces (mini fab labs) designed by MIT USA to prototype their products. Additionally, courses in the area of digital fabrication, AR/VR, blockchain, data analytics are provided in association with global leaders like Unity Technologies, Intel, etc to create necessary skill set for young entrepreneurs to start tech startups.

KSUM also provides high quality technical infrastructure including a state-of-the-art Super Fab Lab, ESDM facility, prototyping and manufacturing support, access to design and simulation software, etc to help startups to develop their products without investing on hardware assets. These facilities enable more startups to develop high tech solutions. All these measures have helped KSUM enhance a number of technology startups in the ecosystem.

At a time when there have been major layoffs in the space on one hand, and on the other many have gotten investments. How would you explain this dual scenario?
While Covid-19 has slowed down businesses in several sectors, it has also opened up new vistas of demand in the short run. Moreover, the hope of a V model of economic recovery in the post pandemic period also enables many investors to support startups who have products which could register exponential growth when economy revives in the post-Covid period. In Kerala, we have seen that startups with strong fundamentals are able to attract investments and expand to new markets. About Rs 250 crore investment came to about 15 startups during last three months, indicating positive investor sentiment.

Can we expect a ray of hope for the startup space?
We strongly believe that the new normal will be highly beneficial for small agile startup enterprises. With the flexibility to pivot the product and capability to meet hyper local demand in multiple domains, startups could create a new niche market in the days to come. In several sectors, startups had a disadvantage in the pre-covid era as they had well financed  rivals with huge cash flows. Ironically, Covid had been a great equaliser, with all players – new or old – currently remaining at the same level. The innovation, potential, skill sets and low overheads can  make startups take a lead in the post Covid era. In a recent survey among startups, it was found that 19 per cent of startups have increased revenue during this period and 16 per cent of them had increased the hiring and team size. It was also heartening to note that about 50 per cent of them could enhance the clients during this period. All these indicates that Covid-19 may turnout to be a perfect storm for startups.