BENGALURU: Entrepreneurs and startups across the country seeking funds can soon look to the Karnataka government. Starting this year, the state government is set to start funding technology startups based across the country by calling them to register in Karnataka, IT minister Priyank Kharge told ET.

Entrepreneurs can apply to the Karnataka government for funds provided they register the companies here under the Karnataka Shops and Commercial Establishment Act, 1961, the minister for information technology, biotechnology and tourism said. “We want to take our startup policy to the national level this year. We will support startups from across the country provided they pay taxes here,” Kharge said. The Karnataka government launched the startup policy in 2015, and has set up several funds with a corpus of over Rs 300 crore to back startups across different sectors such as biotechnology, tourism and animation.

The minister did not elaborate on when the new phase will kick off and whether more funds will be allocated. About 5,000 startups have registered with the Karnataka government so far under the policy, Kharge said. The state had given funds to 250 firms in 2017. In the five-year startup policy plan, the state government had set a vision of boosting 20,000 technology-based startups by 2020 in Karnataka and creating 6 lakh direct and 12 lakh indirect new jobs in the sector.

The move to attract entrepreneurs from across the country has its own advantages and challenges, some startup ecosystem members said.

“There is a good side to this and a bad side. The good part is it will attract great talent and businesses here, and will boost employment,” said Naganand Doraswamy, founder of VC fund Ideaspring Capital and former president of TiE’s Bangalore chapter. “However, Bengaluru is already congested, and the government will need to find the right place, maybe outside the city,” he added. Many of the unicorns (startups valued over $1billion) in the country, including Flipkart, Ola, Mu Sigma, InMobi and Quikr are based in the state.

However, there have been a few hurdles for startups in the state, from infrastructural issues to conflicting regulations.

Earlier this year, Ola and Uber were temporarily asked to halt their ride-sharing services, since they did not possess a stage-carriage permit that allows pick-ups and drops along a particular route. Recently, RedBus received a notice from the transport department, which said the firm was operating as an agent without obtaining the necessary licence from the regional transport authority.

Several startups and their staff, like many residents of the city, were also affected by flooding during the recent monsoons.

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