The Karnataka Digital Economy Mission (KDEM) has partnered with State Bank of India to support the start-up ecosystem of Karnataka.
KDEM and SBI exchanged a memorandum of understanding (MoU) wherein SBI will be now partnering with the Fintech Innovation hub at Mangaluru and leveraging the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTSME) scheme to provide funding support to the start-ups in the state.
SBI will be opening an exclusive start-up desk in the ‘Innovation Tower’ at HSR layout, Bengaluru to offer services to start-ups. The branch will offer up to ₹2 crore loan to startups without collateral. The important feature of this partnership is to extend CGTSME to ELEVATE Winners and to AIF-supported start-ups of Karnataka.
The Elevate-Idea2PoC was launched by the Department of Electronics, IT, BT, and S&T, Government of Karnataka to identify and nurture innovative start-ups and provide them the necessary boost at various stages through funding or mentoring. So far, the programme has 750 ELEVATE winners, and with this MoU more than 1,000 start-ups will be supported.
Cluster seed funds
Subsequently, KDEM will assist SBI in opening branches across the three clusters of Mysuru, Mangaluru, and Hubballi-Belagavi to support start-ups based out of these cluster. KDEM’s three cluster seed funds of ₹25 crore each, will also receive some investment from SBI along with the ₹20 crore contribution from the State government and the rest will come from industry players.
Ashwathnarayan C N, Minister, Dept of Electronics, IT BT S&T, said, “Karnataka has already established itself as a leading state in the nation with a favourable start-up ecosystem supported by a robust policy framework and infrastructure. I am pleased that a huge public sector conglomerate such as SBI values the importance of building an enriching environment, that will elevate the state and the nation’s digital economy. I congratulate Sanjeev Gupta and Rana Ashutosh kumar Singh for the signing of the MoU and for their support of the innovation hub in Mangaluru.”
Rana Ashutosh Kumar Singh, Deputy Managing Director (Transaction Banking & New Initiatives), SBI said, “It is a great pleasure for us at SBI to partner with organisations such as the Karnataka Digital Economy Mission and the Government that is striving to build a world-class innovation hub and a robust start-up ecosystem that will inspire the nation. We believe that this is a fitting partnership as we can converge our financial acumen with KDEM’s platform and reach that will together become a gamechanger for the industry.”
B V Naidu, Chairman, KDEM said, “KDEM has always strived to be an enabler of change and innovation in Karnataka’s start-up journey. This MOU will add another flavour of comprehensive financial services available to start-ups. SBI has shown keen interest in the opening of the start-up branches in the emerging tech clusters like Mangaluru, Mysuru, and Hubballi in the next 3-6 months.”
The MoU will further allow the two parties to participate in cluster funds under KITVEN (Karnataka Information Technology Venture Capital Fund). KITVEN Fund has invested in emerging companies with a long-term investment approach and also focused on investments in seed/rapid growth opportunities within the State.