The southern state of Kerala has always excelled in nurturing its startup community. Kerala Startup Mission (KSUM) – the nodal agency of the Kerala government for entrepreneurship development and incubation activities – is the pillar to support that nurturing.
Speaking with Dr. Saji Gopinath, CEO, Kerala Startup Mission, Voice&Data uncovers how the state with its progressive ideologies supported its startups during the initial days of lockdown and how under Dr. Gopinath's leadership, supportive programs were extended to ensure smooth business continuity while innovative and COVID specific inventions were rolled out from the state’s startup ecosystem.
Voice&Data (V&D): The pandemic was so sudden, that it gave us no room to be proactive in facing the untoward challenge. How did the startups under KSUM face this sudden challenge? How did they reorient themselves to meet business continuity?
Dr. Saji Gopinath: As in the case of most businesses in the world the “black swan” event of COVID pandemic has affected the startups all of a sudden slowing down their business during the month of March. However, since startups supported by KSUM are all in the technology domain and with most of them using digital technologies, their adoption of Work From Home mode was rather smooth, and most had regained their business by the month of April. Though Kerala was the first state to report COVID infection, the State as a whole showed substantial resistance to infection through substantial grassroots level activities and could flatten the curve within 60 days. The environmental support for business continuity was more or less ensured within a short period of time itself.
As regards to the startups, only around 20% of startups had suffered business disruption while another 30% had business lowdown. Another 30% had business as usual or could quickly pivot the solution to meet the new demand. The remaining 20%, especially the startups in sectors like Edtech, Hyperlocal e-commerce, medical tech, fintech, nearshore solutions, communication, etc. had shown steady growth during this period.
The reorientation towards business continuity depended on the type of business they were engaged with. Primarily three trends were visible. Those start-ups who were working in sectors that had shown growth, augmented its resources, and expanded to new markets while many others working in sectors that had slowed down had pivoted their product to meet the requirements thrown open by Covid-19 pandemic. The third category of startups have focused on cost reduction and used remote working effectively to ensure the least disruption in work.
All startups working in KSUM’s premises and in other govt. incubation spaces were given a full waiver of the licence fee for a period of 4 months.
V&D: Startups usually have very limited resources to manage their operations. While being affected by the pandemic, how did the Kerala gov. step in to help these startups get back to business?
Dr. Gopinath: Kerala Government (Kerala Startup Mission) adopted a four-prong strategy to support startups in the time of COVID. The elements of the 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 govt. incubation spaces were given a full waiver of the licence fee for a period of 4 months. Further, the Government extended a 6-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 connections and potential funding sources. During this period around Rs 230 Crores 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 up to 10 Cr of funding against purchase orders, Rs 5 Cr of venture debt, and Rs 1 Cr 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 portal single-window 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 getting new business. Additionally, the products to fight COVID needed by Government departments were sourced from startups under the Direct Procurement Scheme. Many startups were able to pivot or develop new products to meet the burgeoning demand for health care products during the COVID time.
All of these measures helped startups to stay afloat and grow during the pandemic.
V&D: How were startups developing technologies and solutions specifically for mitigating COVID, supported by KSUM?
Dr. Gopinath: During the pandemic, a large number of startups and innovators were involved in developing products and services specifically to mitigate the ill effects of COVID. KSUM supported them in multiple ways. The infrastructure facility of KSUM, including Super Fab Lab, fab labs, etc. were open to startups who wanted to develop new products. KSUM also linked them with industry bodies to support the scale-up of prototypes developed by startups so that they achieve scale in a short time. A “Break Corona” campaign was conducted to source good solutions and link them with various Government agencies involved in fighting the pandemic.
A “Break Corona” campaign was conducted to source good solutions and link them with various Government agencies involved in fighting the pandemic.
CSR funds were sourced to support the development of many prototypes and products by startups and to help distribute them to the needy. All these support enabled several startups to come out with excellent solutions, some of them- including the medical robot and fake news avoidance App - got international and national attention.
V&D: What are the learnings from this pandemic? Going further how will KSUM design policies that strengthen the support system for startups?
Dr. Gopinath: A key learning from the pandemic is to have policies that support startups to exploit the local demand. As pandemic has created supply chain disruptions, the need for right shoring becomes a necessity especially in the case of hardware startups.
The need for high-quality testing infrastructure was felt strongly during the pandemic to produce high-quality solutions in scale. KSUM also got invaluable support from research agencies in the State during the pandemic which helped many startups in developing products of high quality. Schemes to support such translational research will soon be introduced by Startup Mission to strengthen this linkage
V&D: Which technologies have found to have the greatest relevance in today’s world and how are the Kerala startups exploiting those technologies to help the state function better and serve the state’s people better?
Dr. Gopinath: The Covid-19 had accelerated the adoption of digital technologies in a big way. Even conventional business, industry, and commerce have now realized the need for digital transformation to tide over the crisis and to propel the growth in the new Normal.
Many hardware technologies, like ventilators, respirators, mask disposing devices, medical assistance devices, automatic dispensers, etc. seem to benefit effective COVID management while software products like hyper-local e-comm solutions, tracing apps, quick delivery solutions have helped people who had limited mobility due to pandemic situation. Biotech solutions for sanitization, automation solutions to address the lack of labor due to migration, etc. also are proving to be quite useful for people at large.
V&D: Fablabs are paving the way to DIY culture in the country. What is your take on this?
Dr Gopinath: Kerala Startup Mission has a network of Fab Labs in the State. In addition to the country’s only Super Fab Lab, KSUM also has two fab labs and supports 22 mini fab labs in various colleges and universities. All these infrastructures were active during the COVID period supporting innovators to use this high tech facility to develop several products ranging from facemasks to high-end ventilators. While minfab labs supported college-based innovators in develop DIY open-source designs, the more sophisticated fab facilities provide industry-level production support to develop many products at scale.
V&D: The government has now formally announced the banning of Chinese Apps. How does this provide a good opportunity for developers/startups in Kerala?
Dr. Gopinath: Kerala is one of the few states that hosts a Mobile Application Development Accelerator Mobile 10X, formed by Internet and Mobile Association of India, with a view to developing high-quality mobile applications. The work of startups in Mobile 10X and many others in the ecosystem who have already developed high-quality mobile Apps for various applications is getting a boost with the Government seeking alternatives for Chinese apps. We believe the banning of Chinese apps will prove highly beneficial to the mobile developer ecosystem in the State and expect many high-quality popular applications to come out in the near future.
We believe the banning of Chinese apps will prove highly beneficial to the mobile developer ecosystem in the State and expect many high-quality popular applications to come out in the near future.
V&D: In the telecom space how are startups under KSUM developing technologies for advanced network and communication capabilities for India? How has collaboration with telecom companies progressed?
Dr. Gopinath: The Ministry of Electronics and Information technology (MeitY) had recently conducted a nation-wide competition to develop a good communication solution in lieu of Zoom. I am happy to note that one of the three finalists of this competition, which saw the participation of hundreds of companies across the world is a scaleup company from Kerala. Given the early history of Kerala in electronics and communication technologies, there are several startups who are working in advanced communication technologies ranging from LoRa to 5G.
Maker Village, the country’s largest electronic incubator at Kochi formed jointly by Govt. of Kerala and Govt. of India is hosting several startups in communication technologies, drone-based solutions, and other advanced electronics technologies. We believe many of these startups will find a fast growth trajectory in this period of disruption.