Karnataka Invests $68M to Build 25,000 Startups by 2030

Karnataka just became India's most startup-friendly state with a bold promise: create 25,000 new companies by 2030, with nearly half launching outside the tech capital of Bengaluru.

The southern Indian state announced its 2025-2030 startup policy with 571 crore rupees ($68 million) earmarked for young companies working on artificial intelligence, quantum computing, biotech, and sustainability tech. This represents one of India's largest regional investments in innovation infrastructure.

The plan addresses a common problem in emerging economies: innovation clusters too heavily in one megacity. Karnataka's "Beyond Bengaluru Cluster Seed Fund" dedicates $9 million specifically to startups in smaller cities like Mysuru, Mangaluru, and Hubballi-Dharwad, offering equity investments starting at $6,000 per company.

Women entrepreneurs are already seeing results. At the recent ELEVATE 2025 awards ceremony, 43% of the 146 winning startups were women-led, sharing $4.6 million in grants. That same percentage came from cities outside Bengaluru, proving the decentralization strategy is working.

The state's most ambitious program, ELEVATE NxT, offers up to $12,000 per startup for deeptech ventures. The milestone-based funding supports companies working on robotics, green energy, and quantum technologies, with participation open to startups anywhere in India.

Karnataka has built credibility in this space. Since launching its first ELEVATE program in 2017, the state has distributed $34 million to 1,230 startups, creating thousands of jobs and establishing India's Silicon Valley reputation.

The new policy targets sectors where India competes globally: electronics manufacturing, semiconductors, biotechnology, and the booming animation and gaming industries. These aren't just buzzy tech terms but real industries creating middle-class jobs across urban and rural areas.

The Ripple Effect

When startup ecosystems spread beyond major cities, entire regions transform. Smaller cities gain high-paying jobs that keep young talent from migrating to overcrowded metros. Local universities partner with startups, improving education quality. Service industries flourish around tech hubs, from coworking spaces to cafes to housing.

Karnataka's approach shows how targeted government investment can reshape economic geography. By requiring half of new startups to launch outside Bengaluru, the policy ensures smaller cities build their own innovation cultures rather than feeding brain drain to the capital.

The emphasis on women founders matters too. Female entrepreneurship in India has historically lagged, but Karnataka's 43% achievement suggests that deliberate inclusion policies work when backed by real funding.

With India positioning itself as a global tech leader, Karnataka's bet on distributed innovation could become a model for other states and developing nations looking to build startup ecosystems that lift entire regions, not just their biggest cities.