Karnataka’s ₹570 Cr Startup Machine

A deep-tech founder in Mysuru applied for ELEVATE two years ago. He received ₹23 lakh — the average grant size. He used it to build a working prototype. He was grateful. He moved on.

What nobody told him was that ELEVATE was just one of five parallel funding channels running simultaneously through Karnataka’s startup ecosystem. He could have simultaneously applied for the Beyond Bengaluru Cluster Seed Fund — a ₹75 crore pool offering ₹50 lakh-plus equity investments specifically for startups in Mysuru, Mangaluru, and Hubballi. He could have joined the Karnataka Acceleration Network for a six-month growth sprint with mentor connections and VC introductions. He could have claimed 100% SGST reimbursement for three years — available to all Beyond Bengaluru startups in government-supported incubators. And his patents could have been reimbursed at ₹2 lakh for domestic and ₹10 lakh for international filings.

He used one channel. Five were running at the same time.

Karnataka unveiled the Startup Policy 2025–2030 in January 2026 with a total outlay of ₹570.675 crore. Since 2017, the ELEVATE programme has already disbursed ₹287.85 crore as grant-in-aid seed funding to 1,230 startups. India’s first state to offer grants without taking equity. And now the new policy adds ₹570 crore more.

Here are all five channels — and exactly how they work together.

Channel 1: ELEVATE — the flagship ₹50 lakh zero-equity grant

ELEVATE provides a one-time grant-in-aid of up to ₹50 lakh to startups recognised under this program. In addition, they are given mentoring and incubation support at subsidised rates at government-supported incubation centres to help in product development and validation.

The track record is extensive. Since its launch in 2017, the ELEVATE program has disbursed ₹287.85 crore as grant-in-aid seed funding to 1,230 startups across Karnataka. Of these, 37% are from beyond Bengaluru, while 28% are led by women entrepreneurs.

On average, each startup received between ₹22 to ₹23 lakh in seed funding. Grants in the 2024 round ranged between ₹21 lakh and ₹50 lakh per startup.

The 2025 cohort shows the program’s scale and inclusivity. 103 ELEVATE 2025 winners, 33 ELEVATE Unnati winners and 10 ELEVATE Minorities 2025 startups with a total committed grant of ₹38.85 crore. Statistics show that 43% of the winners are women-led enterprises, while 43% are based Beyond Bengaluru.

ELEVATE runs three separate tracks within each cohort:

• ELEVATE General: A total grant amount of ₹25.33 crore will be disbursed to the 103 selected startups.
• ELEVATE Unnati (SC/ST): 33 startups awarded with a committed grant of ₹9.52 crore. 55% are located in Beyond Bengaluru districts, and 39% are led by women entrepreneurs.
• ELEVATE Minorities: 10 startups recognised with a committed grant of ₹3.65 crore. 50% are from Beyond Bengaluru, and 20% are led by women entrepreneurs.

A sector-wise analysis of the 103 ELEVATE 2025 winners shows 23 startups from agri-tech, biotechnology, food and beverages, and food processing; 19 from consumer electronics, ESDM, and aerospace; and 14 from healthcare and pharmaceuticals.

Channel 2: ELEVATE NxT — the ₹1 crore deep tech game-changer

This is the newest and most significant addition to Karnataka’s startup ecosystem. The Karnataka government on January 17 rolled out ELEVATE NxT, a flagship deep-tech startup support programme under the Local Economy Accelerator Programme.

ELEVATE NxT is being launched as a flagship initiative under the LEAP framework. This program is designed to nurture startups working at the frontiers of science and engineering, with a strong focus on transformative technologies including AI, Machine Learning, IoT, Blockchain, AR and VR, Robotics, 3D Printing, Drones, Biotech, Quantum Computing, Advanced Materials, Cybersecurity, Green Energy, and SpaceTech. ELEVATE NxT provides milestone-based funding and sector-aligned mentorship. The program is open to DeepTech startups from across India. The Government of Karnataka has earmarked ₹150 crore for ELEVATE NxT.

The key differences from regular ELEVATE are significant:

• ₹1 crore per startup — double the ₹50 lakh ELEVATE ceiling
• Milestone-based disbursement — not a lump sum, which means the money flows as you hit targets
• Open to startups from across India — you do not need to be Karnataka-based to apply
• ₹150 crore total corpus — significantly larger than the ₹38.85 crore committed to the 2025 ELEVATE cohort

If you are building in AI, biotech, quantum computing, spacetech, green energy, cybersecurity, or advanced materials — this is India’s largest non-dilutive deep tech grant at the state level. And the application is open nationally.

Channel 3: Beyond Bengaluru Cluster Seed Fund — ₹75 crore for Tier 2/3 startups

A major highlight of the rollout is the launch of the ₹75-crore Beyond Bengaluru Cluster Seed Fund, aimed at promoting startup growth in non-metro regions. The state government will contribute ₹20 crore to the fund, while the rest will be mobilised through institutional and private participation. In its initial phase, the fund will focus on emerging clusters in Mysuru, Mangaluru, and Hubballi–Dharwad. The seed fund will provide equity and equity-linked investments starting from ₹50 lakh per startup.

This fund targets specific sectors: IT, electronics and semiconductor manufacturing, biotechnology, and the AVGC sector.

The Beyond Bengaluru mission is broader than just the seed fund. The mission focuses on six key clusters — Mysuru, Mangaluru, Hubballi, Kalaburagi, Shivamogga, and Tumakuru — leveraging their regional strengths through partnerships, incubation, ecosystem development, and policy support.

Each cluster has a distinct identity:

• Mangaluru: Emerged as a vibrant fintech cluster, driving innovation and digital transformation in financial services.
• Hubballi-Dharwad-Belagavi: An emerging cluster for AI, ML, IoT, and advanced manufacturing.
• Mysuru: Positioned as a balanced tech hub with strong policy enablers and talent pipeline

And Beyond Bengaluru startups get two additional benefits that Bengaluru startups do not:

The SGST reimbursement alone can be worth lakhs per year. At the standard 18% GST rate, 9% goes to the state as SGST. For a startup with ₹1 crore in annual revenue, 100% SGST reimbursement means ₹9 lakh flowing back into your business every year for three years. That is ₹27 lakh in tax savings — on top of the grant funding.

Channel 4: LEAP — the ₹1,000 crore infrastructure programme

Local Economy Accelerator Program (LEAP) is a ₹1,000 crore, 5-year initiative launched by the Government of Karnataka to supercharge regional entrepreneurship, decentralise innovation, and amplify growth across the state’s emerging tech clusters.

The objective is to develop innovation and the startup ecosystem beyond the state capital Bengaluru and generate employment across the state. The program has set a target of creating 5 lakh jobs.

LEAP is the umbrella under which ELEVATE NxT was launched. It is not a standalone funding scheme you apply to directly — it is the infrastructure framework that powers the other channels. The ₹1,000 crore budget funds incubators, Centres of Excellence, Technology Business Incubators, NAIN centres at universities, and the acceleration network across the state.

For founders, LEAP matters because it is creating the physical infrastructure — incubation spaces, labs, mentorship networks, and industry connections — in cities where none existed before. If you are building in Mysuru, Mangaluru, Hubballi, Kalaburagi, Shivamogga, or Tumakuru, LEAP is the reason you now have access to a startup ecosystem that rivals what Bengaluru had five years ago.

Channel 5: Karnataka Acceleration Network — the six-month growth sprint

The Government of Karnataka announced the establishment of the Karnataka Acceleration Network (KAN) to bolster the startup ecosystem. This initiative, orchestrated by KDEM, aims to enrich the startup landscape not just in Bengaluru, but across other burgeoning regions including Mysuru, Mangaluru, Hubballi, Dharwad, and Belagavi. KAN will foster acceleration ecosystems within these key clusters, encouraging collaboration between Bengaluru-based accelerators and their local counterparts. This statewide network of accelerators is designed to tackle startup challenges across critical sectors.

Karnataka Acceleration Network is an initiative by KDEM aimed at nurturing approximately 306 startups over a period of 3 years, through a unique model of mentor-mentee relationship between the participating accelerators and incubators. The Acceleration network includes three Accelerators from Bengaluru and one Accelerator or Incubator each from the three clusters — Mysuru, Mangaluru, and Hubballi-Dharwad-Belagavi.

The six-month acceleration program offers growth stage startups comprehensive support through a series of modules. KAN is designed for startups that have already proven their concept and need structured acceleration to scale — making it the natural next step after ELEVATE.

The KDEM support stack — what you get beyond money

KDEM — the Karnataka Digital Economy Mission — is not just a funding body. It is a full ecosystem engine that powers the startup infrastructure across the state.

Pfizer has announced the winners of the INDovation Program 2025 edition. The programme selected 14 promising healthtech startups who will receive grants of ₹60 lakh each and 18 months of other incubation support. This is just one example of the corporate innovation programmes running through KDEM’s network.

Beyond Bengaluru BLUE is a strategic initiative by KDEM under the larger Beyond Bengaluru program, aimed at accelerating the growth of startups and digital innovation beyond the capital city. Focused on fostering a vibrant, inclusive tech ecosystem in emerging clusters like Mysuru, the initiative creates a platform for high-potential startups to connect with investors, showcase innovations, and scale their ventures.

The support includes: Global Innovation Alliances that help startups get market access to international markets. KDEM facilitates the formation of strategic alliances with key players in partner countries and Karnataka. Plus a Startup Booster Kit launched with ELEVATE 2025, women entrepreneur support including direct loans of ₹10 lakh and 25% reservation in the venture capital fund, and an early-stage funding program providing a monthly stipend of ₹25,000 for 12 months for innovators.

How the five channels stack together

Here is the critical insight most founders miss: these five channels are independent programmes from different parts of the state’s startup machinery. They do not cancel each other out — they compound.

The three-year eligibility gap rule means you cannot hold an ELEVATE grant and apply for another ELEVATE grant simultaneously. But you can hold an ELEVATE grant and simultaneously access KAN acceleration, Beyond Bengaluru BLUE investor events, SGST reimbursement, patent reimbursement, and the Startup Booster Kit. And if you are deep tech, ELEVATE NxT is a separate programme with its own ₹150 crore corpus.

Why Karnataka’s approach is structurally different from other states

Most state startup policies offer a single grant programme and a few incubators. Karnataka has built something fundamentally more layered — and the track record proves it works.

Karnataka remains the first state in India to offer grant support to startups without taking equity. That single policy decision — made in 2017 — changed the calculus for thousands of founders. A ₹50 lakh grant with zero equity means the founder retains 100% ownership during the most vulnerable stage of building. No other state made this commitment first.

The ELEVATE programme has now run for eight years with documented outcomes. In 2024, Karnataka’s ELEVATE program awarded seed funding to 101 startups, distributing a total of ₹25 crore. These startups spanned sectors such as sustainability, biotechnology, aerospace, and rural innovation. 42 of the funded startups had women founders, and 36 were from regions beyond Bengaluru.

The Beyond Bengaluru mission is creating something no other state has attempted at this scale — a deliberate, funded effort to build multiple innovation clusters with distinct identities. KDEM’s target: Mangaluru cluster to spearhead investments in IT/ITeS and FinTech sectors generating revenue worth USD 1 billion and 1,00,000 jobs. The Hubballi-Dharwad-Belagavi region to emerge as a corridor of economic growth and development.

And Bengaluru itself remains India’s undisputed startup capital. The state aims to position itself among the top three global startup ecosystems, leveraging about 45 unicorns and a combined valuation around $161 billion centred in Bengaluru. The new policy is not replacing Bengaluru’s dominance — it is extending it across the state.

Who should apply — and through which channel

For ELEVATE Unnati, at least one Director or Partner must belong to the SC/ST community and hold a minimum of 70% equity in the company or firm. The SC/ST Director or Partner must possess a valid digital caste certificate from the Revenue Department, Government of Karnataka.

The selection process — how 146 winners were chosen in 2025

Understanding how ELEVATE selection works dramatically improves your chances of being in the winning cohort.

The process starts with an online application via the Startup Karnataka Portal. This is followed by eligibility checks, pitch deck evaluation, multi-city pitching rounds, and a grand finale. If shortlisted, you pitch to a jury featuring NASSCOM, TiE, and VC judges.

Minister Priyank Kharge reiterated that the sustained success of the ELEVATE program lies in its mission-mode implementation. “Launched in 2017, ELEVATE has evolved into a powerful enabler for startups by providing critical financial assistance, mentorship, and ecosystem support. The program continues to drive technological advancement, job creation, and inclusive economic growth across Karnataka,” he said.

The practical advice: do not just pitch what your product does — pitch why it is better than existing solutions with specific metrics. Focus on the problem’s scale, your technology’s differentiation, the team’s ability to execute, and the clarity of your fund utilisation plan. ELEVATE evaluators look for startups that can demonstrate product-market fit signals, early customer feedback, and the technological capability to execute.

Your Karnataka stacking action plan

Why Karnataka’s eight-year track record matters

Most state startup policies are announcements. Karnataka’s is a track record.

₹287.85 crore disbursed. 1,230 startups funded. Eight consecutive years of ELEVATE cohorts. 37% of funded startups from beyond Bengaluru. 28% women-led. Three dedicated inclusion tracks — General, Unnati (SC/ST), and Minorities. A patent reimbursement programme that actually processes claims. An SGST reimbursement that actually returns money quarterly.

The new ₹570 crore policy is not a promise. It is an expansion of something that has been working for eight years. The ELEVATE NxT ₹1 crore deep tech grant, the ₹75 crore Cluster Seed Fund, the ₹1,000 crore LEAP infrastructure programme — these are additions to a foundation that has already proven itself.

With the Startup Policy 2025–30, Karnataka aims to build a more resilient, inclusive, and globally competitive innovation ecosystem — cementing its reputation as the startup capital of India.

The infrastructure is massive and growing. The money is allocated and being disbursed. The application windows open regularly. The founders who benefit are not the ones with the best ideas — they are the ones who registered on both portals, connected with an incubator, and applied to every channel that fits their stage.

Karnataka does not just talk about ecosystem. It writes cheques — ₹287 crore worth of them over eight years, with ₹570 crore more committed. India’s first state to offer grants without equity, and still the most generous. Five parallel channels. One registration. Stack every channel that fits your stage.