Karnataka Levels Playing Field for Small-City Startups

Entrepreneurs in India's smaller cities just got a major boost in their quest to build the next big thing.

Karnataka's government recently created a separate track in its ELEVATE grant program specifically for startups outside Bengaluru. The change means founders in tier 2 and tier 3 cities no longer compete directly against well-connected Bengaluru ventures for grants ranging from ₹50 lakh to ₹1 crore.

Sudheer Shankar, who leads Karnataka Digital Economy Mission's Mysuru cluster, announced the welcome news at the Mundhe Banni Meetup in Mysuru on Saturday. He explained that the previous system created unfair competition, pitting startups from emerging cities against those in India's Silicon Valley.

The new "Beyond Bengaluru" track joins three other ELEVATE categories. These include a general track open to all domains, Shakti for women-majority owned ventures, and Unnati focused on SC/ST founders.

The announcement came during a packed event that far exceeded registration expectations. Founders, students, and innovation enthusiasts filled R.P. Singhania Auditorium at JSS Science and Technology University, reflecting Mysuru's growing startup energy.

Several successful entrepreneurs shared their journeys at the meetup. N. Ravi Shankar from AIM High Consulting spoke about building large enterprises from smaller towns, emphasizing that ambition and perseverance matter more than location. Three local founders discussed their real challenges and turning points in the Founder Spotlight session.

The Ripple Effect

This policy shift could transform Karnataka's innovation landscape beyond Bengaluru. When emerging cities gain fair access to funding, more entrepreneurs can build solutions rooted in their local communities while creating jobs closer to home.

The packed auditorium in Mysuru signals something important: entrepreneurial talent exists everywhere, not just in major metros. By removing funding barriers, Karnataka is betting that its next breakthrough startup might come from a city many investors overlook.

The overwhelming turnout also showed that aspiring entrepreneurs were hungry for these opportunities all along. They just needed a level playing field and community support to pursue their ideas.

As more states watch Karnataka's experiment, this approach could spread nationwide, helping talented founders succeed wherever they call home.