The Karnataka government is charting a novel path to fuel its startup ecosystem by tapping into the robust profits of state-owned Public Sector Undertakings (PSUs). The plan involves mobilizing capital to create two dedicated venture capital funds aimed at nurturing early-stage companies.
Two-Pronged Fund Strategy for State-Wide Growth
This financial initiative will be executed through two distinct funds. The first, named KITVEN-5, is setting its sights on accumulating a corpus of Rs 100 crore. The second, a regionally focused effort called the Beyond Bengaluru fund, is targeting a smaller but significant corpus of Rs 75 crore. The primary objective is to channel these resources into promising startups that demonstrate high growth potential.
Projected Impact on Employment and Entrepreneurship
According to government estimates, the combined financial muscle of these two funds is expected to provide crucial support to approximately 15 to 18 startups. This infusion of capital and guidance is projected to have a substantial ripple effect on job creation in the state. Officials anticipate that the initiative could generate between 1,000 to 1,500 direct and indirect jobs, boosting the local economy and fostering innovation beyond the state's capital city.
A Strategic Move for Sustainable Funding
This move represents a strategic shift by leveraging existing state resources—PSU profits—to build a sustainable funding mechanism for the future. Instead of relying solely on budgetary allocations, the model aims to recycle successful enterprises' earnings to seed the next generation of innovators. The focus on a fund specifically for areas Beyond Bengaluru underscores a commitment to decentralizing the startup boom and promoting inclusive economic development across Karnataka's various districts.
The announcement, reported by Bharath Joshi, was last updated on 06 December 2025. If implemented effectively, this model could set a precedent for other Indian states looking to creatively fund their startup ambitions without straining the exchequer.
