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Startup sector inches towards consolidation

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The New Indian Express | By Pramod Thomas   |  Express News Service  |   24th January 2017 |

KOCHI: Though there had been a 25 percent fall in funding for Kerala-based startups in 2016, the sector is now inching towards consolidation. Interestingly, national as well as global investors are eyeing the state as a sweet spot for startups. And 2015 has been the golden year so far,in terms of funding, as six startups in the state received Rs 148 crore, the highest in four years. In marked contrast , the funding in 2016 added up to only Rs 113 crore.  Last year saw a 67 per cent increase in deal count, from six to 10. However, there was a 25 per cent fall in the total funding received. This was attributed to the fact that there had been less major funding as compared to 2015, with more SEED and Angel rounds taking place.  “Even though the total amount received by startups in Kerala had gone down in 2016, the number of startups which received funding went up. It is a healthy sign. I consider this a positive sign. It is interesting to see more mature startups in Kerala. The noise has been filtered with reasonable success,” says Robin Alex Panicker, co-founder, BasilGregory Software Labs, which tracks Kerala startups.

The companies which received funding in 2016, include Purple Health, Vehicle ST, Zybo Tracking Solutions, Sastra Robotics, BuildNext, Good Methods Global, Salesfone, Aisle and FreshToHome.  According to Kerala Startup Mission, there are 300 startups in the state and 200 student startups associated with the Kerala Technological University. But experts in the field say the active startups in the state will be 100 (excluding student startups) as many of them are dormant. Many startups are also closing shop as well. Rush2You and D4Delivery– two startups in Thiruvananthapuram that closed shop a couple of months ago– are the latest example. Realising the fact  Startup Mission has been scrutinising these startups for sometime now.  “We have been monitoring startups closely for two years in Thiruvananthapuram and for the last one year in Kochi. Now, no one is allowed to remain dormant. Either they have to shut it down or move to a viable product. It is easier with product-based startups than service-based ones,” said Jayasankar Prasad, CEO, Kerala Startup Mission, adding,the Kerala-based startups have come of age. –  Courtesy

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