Kerala’s burgeoning startup ecosystem has surged to an impressive valuation of $1.7 billion over the 18 months leading up to the end of 2023, significantly outpacing the global average growth, according to the recently released 2024 Global Startup Ecosystem Report (GSER).
The GSER highlights that while the worldwide average growth rate for startup ecosystems was 46% during this period, Kerala’s ecosystem grew at a remarkable 254% compound annual growth rate (CAGR) from July 1, 2021, to December 31, 2023. This surge places Kerala’s growth at over five times the global average, underscoring the state’s dynamic and rapidly evolving startup landscape.
Exceptional Growth
The concept of Ecosystem Value, used in the GSER, measures economic impact through the value of exits and startup valuations. Kerala’s ecosystem has shown notable performance across various metrics:
- Affordable Talent: Ranked fourth among Asia’s ecosystems, Kerala excels in the availability of affordable and skilled tech talent.
- Performance: The state is listed among the top 30 ecosystems in Asia for startup performance, highlighting its robust startup activities and successes.
- Bang for Buck: Kerala is among the top 20 Asian ecosystems where tech startups get significant value from venture capital rounds.
- Knowledge and Funding: The state ranks within the top 35 in Asia for innovation, measured through research, patent activity, and early-stage funding.
Chief Minister Pinarayi Vijayan emphasized Kerala’s commitment to fostering a vibrant startup environment. “We are now pivoting towards Deep Tech, investing in talent and infrastructure to nurture groundbreaking startups in advanced technologies,” he stated in a press release. This vision is reflected in the state’s strategic initiatives to build on its already dynamic startup ecosystem.
Kerala’s startups raised $33.2 million (₹227 crore) in 2023, a 15% increase from the previous year. This growth is complemented by significant achievements in the IT sector, with software exports reaching $2.3 million in the 2022-23 fiscal year. The state has ambitious goals to secure a 10% share of India’s IT exports and create five lakh new jobs in the near future.
Anoop Ambika, CEO of the Kerala Startup Mission (KSUM), expressed confidence in sustaining and accelerating this growth. “We aim to align our startup growth with the world average in the next five years,” he remarked.
Kerala’s innovative spirit is further showcased by recent technological advancements. In January 2024, the Kerala Digital University introduced the Kairali AI Chip, the state’s first AI processor, marking a significant milestone in its tech landscape. Additionally, a Thiruvananthapuram-based school launched ‘Iris,’ India’s first generative AI robot teacher, capable of instructing in multiple languages, including English, Hindi, and Malayalam.
As per the GSER-2024, Kerala stands out as India’s leading startup ecosystem. The only other Indian states featured in the report are Telangana, Tamil Nadu, and Karnataka, underscoring Kerala’s leading role in the country’s entrepreneurial landscape
