Home to over 1,700 startups, Odisha has set its sights on fostering more than 5K startups by 2025. To achieve this ambitious goal, Odisha CM Naveen Patnaik inaugurated two significant initiatives on September 11, 2023 — the Odisha Startup Yatra 2023 (The latest edition of Odisha Startup Yatra) and Startup Express 2023.
These initiatives are dedicated to nurturing the entrepreneurial spirit and innovative thinking among young minds at the grassroots level, thereby preparing them to leverage the abundant opportunities within the state’s startup space.
As part of these comprehensive campaigns, Startup Odisha will organise over 200 van camps across 200+ colleges, along with 60 boot camps across schools of 30 districts. Additionally, the programme aims to host more than 120 boot camps, which will be aimed at generating over 3,500 unique startup ideas.
Further, a minimum of 50 selected concepts will gain entry to a three-day acceleration programme. Following that, the top 25 concepts will receive an invitation to O-Hub for a demo day, where 10 of them will be granted seed funding of INR 3 lakh each to transform their concepts into flourishing startup ventures. Startup Odisha has also introduced a dedicated mobile application for young innovators to submit groundbreaking ideas.
Established in 2016 under the state Startup Policy 2016, Startup Odisha, a division of the Department of MSME, Odisha, has taken a holistic approach towards forging the startup ecosystem in the state. This includes initiatives such as creating an INR 100 Cr fund of funds, conducting the Startup Yatra to raise awareness about startups, providing monthly incentives to founders in the ideation phase, offering grants during the early stages, and granting preference to startups in public procurement opportunities.
While regions like Karnataka, Gujarat, Delhi NCR, and Telangana often take the spotlight when it comes to startup discussions, it’s important to recognise that among all 28 states and eight union territories in India, Odisha has consistently earned top marks. In both the 2018 and 2021 States’ Startup Rankings, Odisha was designated as the ‘top performer’, and in the 2019 ranking, it was recognised as a ‘leader’ state.
Inc42 recently had an opportunity to speak with Dr Omkar Rai, the executive chairman of Startup Odisha, to gain insights into the state’s plans and the ongoing efforts to elevate Odisha’s position to one of India’s premier startup hubs.
Here are the edited excerpts…
Inc42: Could you help us understand in depth the Startup Odisha initiative and the key programmes that come under its ambit?
Dr Omkar Rai: Startup Odisha has been established under the Startup Policy 2016 (SP2016) by the Government of Odisha. Since its inception, we have implemented a range of measures under SP2016. For instance, we have set up O-hub, a state-run incubator located in the heart of Bhubaneswar, offering around 4 Lakh sq ft of incubation space.
We provide founders with a monthly allowance of INR 20K for 12 months to help them sustain during the ideation phase. Once they progress to creating a prototype or enter the product development phase or market access, we offer them a grant of INR 15 Lakh.
The cases in which startups are engaged in serious research and require significant resources or an extended development period, we offer project-oriented, need-based assistance with no set limit on the grant amount.
To ensure that our state has a robust incubation ecosystem in place, we provide grants to incubators established by government departments, private organisations, or academic institutions. Currently, we have recognised 27 incubators. In addition to this support, we subsidise incubation programmes and incentivise the successful graduation of startups from these incubators. These initiatives aim to accelerate the growth of our startup ecosystem.
Inc42: How many startups have benefited from Startup Odisha-run programmes, and what is the total amount of funds disbursed so far?
Dr Omkar Rai: As of now, we have registered 1,700 startups in our ecosystem, and we have provided grants to over 400 startups, totalling nearly INR 30 Cr. Furthermore, we have incentivised the creation of incubators, with grant sanctions to 10 incubators in the state. Additionally, our startup ecosystem has attracted approximately INR 400 Cr in external investments, including angel and venture funding.
The Odisha government has also introduced the Odisha Startup Growth Fund, a fund of funds, in collaboration with SIDBI. Various [Category I and Category II] Alternative Investment Funds (AIFs) and fund managers will be onboarded, further boosting investment in our ecosystem. We expect investment facilitation in the state to progress significantly in the near future.
Inc42: What are the key operational sectors for Odisha-based startups?
Dr Omkar Rai: While knowledge and IT sectors are predominant in our state, we have observed a diverse range of startup activities as well. Notably, our state excels in agriculture, food production, handicrafts, and handloom, the sectors that mirror our rich cultural heritage. Approximately 9% of startups in Odisha are from the agritech, while another 8% are related to food processing. These sectors represent around 17-18% of our total startup ecosystem.
Additionally, with our state becoming an education hub, we have seen significant activity in biotech and healthcare. The presence of numerous research institutions, medical colleges, and educational institutes has led to the emergence of startups in these domains.
Apart from these sectors, the state also fosters startups working in the hospitality and tourism sectors. Overall, our approach is to nurture growth in sectors where Odisha holds a distinct advantage.
Inc42: Is there a specific focus area for the startup ecosystem in Odisha?
Dr Omkar Rai: We recognise that Odisha has significant strengths in sectors such as metal production and heavy industries. Our goal is to leverage these inherent strengths and become a leader in these areas, both nationally and internationally.
One sector where we aim to lead is the sportstech industry. We envision Odisha as a hub for sportstech startups, taking advantage of our state’s achievements and investments in the sports sector. Additionally, we intend to focus on the metallurgy and metal sector, aiming to outpace other states in the country.
Our objective is not merely incremental growth but rather a transformative one. We aspire to disrupt and transform our state’s growth trajectory, ensuring it stands out in specific domains.
Inc42: You have registered over 1,700 startups in the past six years. How do you plan to reach the target of 5K-plus startups by 2025?
Dr Omkar Rai: To achieve our ambitious target, we are implementing a multi-faceted strategy. We recognise that Odisha has a large talent pool and over 200 educational institutions across the state. Our primary challenge is to disseminate information, create access to the startup ecosystem, and reduce information and facilitation asymmetry, particularly in remote areas.
To address this, we have launched initiatives like the Startup Yatra 2023 and Startup Express 2023. These programmes aim to sensitise and educate young individuals across the state, instilling a culture of innovation and entrepreneurship. Our goal is to ensure that everyone, regardless of their location, should be able to seamlessly access the opportunities that rest in the state’s startup ecosystem.
We plan to increase the number of incubators in the state, with the aim of creating one in every district. This includes encouraging private participation in incubator establishment and incentivising academic institutions to create incubation centres. We are also working on establishing a venture capital fund for early-stage startups within the state.
Furthermore, we are dedicating a 4 Lakh sq ft space called O-hub to house 400-500 startups at any given time. This hub will serve as the epicentre of startup activities, offering mentorship, best practices, and support to other incubators across the state.
With these policy changes and initiatives, we are confident that we can fast-track the growth of our startup ecosystem and reach our target of 5K startups by 2025.
Inc42: How do you plan to strengthen the investment ecosystem in Odisha?
Dr Omkar Rai: We are actively working on building an investment-friendly environment in Odisha. We organise investment events and invite angel investors nationwide to participate.
Additionally, we have launched a fund of funds programme that aims to onboard several Alternative Investment Fund (AIF) managers. These managers will facilitate investments into our ecosystem, incentivised by the state.
We have also collaborated with various stakeholders, including individuals and ecosystem players, to establish Bhuvaneshwar Angel, which will create a platform for high-net-worth individuals (HNIs) to invest in early-stage startups within the state.
To further strengthen our investment ecosystem, we are expanding our outreach to potential cities like Rourkela, Sambalpur, Jharsuguda, Brahmapur, and Balasore. This includes networking with HNIs in these areas to establish similar platforms for seed-level funding.
Our goal is to make sure that startups in Odisha have access to capital, reducing the need for them to migrate to other cities in search of funding.
Inc42: Many startups tend to migrate to larger cities like Mumbai, Pune, Bengaluru, and Hyderabad, how do you plan to address the migration issue?
Dr Omkar Rai: Startup migration is a phenomenon, which is generally driven by market dynamics. While we cannot fully control this, we are implementing strategies to minimise it. Our approach is to create a robust ecosystem within the state that provides startups with the resources and support they need.
By facilitating early-stage funding through initiatives like the fund of funds and Bhuvaneshwar Angel, we aim to dissuade startups from moving to other cities in search of capital. Additionally, we are working on corporate innovation programmes and platforms that will connect startups with corporations, allowing them to solve real-world problems and gain market access.
We acknowledge that migration may always exist to some extent, but our goal is to reduce it significantly by creating a thriving startup ecosystem in Odisha.
The post Odisha Is Well Poised To Foster 5,000+ Startups By 2025: Startup Odisha Chief Dr Omkar Rai appeared first on Inc42 Media.