Karnataka's Law & Parliamentary Affairs Minister HK Patil.
CreditL DH Photo
Bengaluru: Karnataka aims to create 25,000 startups, 10,000 of which will be outside Bengaluru, as per the state government’s startup policy, which was approved by the Cabinet on Thursday.
Addressing reporters after the Cabinet meeting, Law and Parliamentary Affairs Minister HK Patil said: “The Cabinet has approved the Karnataka Startup Policy (2025-30), which will cost Rs 518.27 crore in a span of five years. As per this scheme, Karnataka intends to establish up to 25,000 startups, of which 10,000 will be outside the Bengaluru cluster.”
The startups are expected to focus on areas such as artificial intelligence, blockchain, quantum computing and other deep tech domains.
According to a note by the IT/BT Department, India has the third-largest startup ecosystem in the world, with 1.59 lakh startups, of which 73,151 are led by women.
The note claims that currently Karnataka has over 18,000 registered startups, accounting for 15% of all the startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).
The note also points out that 50% of all funded startups in India originate from Bengaluru. The policy intends to support the development of incubation and acceleration facilities to serve as key enablers in strengthening the startup ecosystem.
“Karnataka already stands as the unrivalled leader in India’s startup landscape, playing a pivotal role in positioning the country as a global innovation and entrepreneurial hub. This strategic initiative will further empower impact-driven business models, boost social entrepreneurship and promote inclusive growth in the state,” IT/BT Minister Priyank Kharge said in a press release.
As per the policy, which DH has accessed, the government intends to establish startups beyond Bengaluru through funding from the Beyond Bengaluru Cluster Seed Fund, as a ‘policy pillar’. “It will support early-stage startups by providing critical seed capital, mentorship, and access to investor networks and help in bridging urban-rural innovation, encourage local entrepreneurship and nurture region-specific solutions,” the policy document says.
The Elevate Beyond Bengaluru will act as a ‘policy pillar’, and be a key initiative by the Karnataka government to foster startup growth in tier 2 and tier 3 cities.
Fund of Funds
The state government intends to create a ‘fund of funds’, another ‘policy pillar’ totalling Rs 500 crore to support startups developing innovative solutions with longer gestation periods.
The policy aims at building a talent-rich ecosystem beyond Bengaluru through growth labs. The six identified tech clusters will be divided into two broad clusters — Cluster A (Mysuru, Mangaluru and Tumakuru) and Cluster B (Hubballi–Dharwad, Kalaburgi and Shivamogga).