God’s own country is emerging as a startup hub. Among the top startup ecosystems in India, Kerala already has 2,200 startups with 230 innovation and entrepreneurship development cells and over 35 incubators, according to a news report. But most of these startups are based in central and south Kerala. North Kerala, or the Malabar region, has not yet found its place in the startup ecosystem.
All this is slowly changing with the emergence of the Malabar Angel Network. Infact, Bengaluru-based artificial intelligence (AI) startup Clootrack Software Labs Private raised seed funding from the network among other angels, in early 2019.
The network was started by three angel investors in October 2018 with one agenda: to promote and encourage startups in the Malabar region. The board of members include Shilen Sagunan, PK Gopalakrishnan, and Subhash Babu K.
The Malabar Angel Network (MAN) is a non-profit organisation that today has an incubation centre. With the support of the Kerala Startup Mission, it inaugurated the Malabar Innovation Zone (MiZone) in Kannur in February 2019. It is the first incubation centre in public-private partnership in Kerala.
“Our board of directors includes a team of highly experienced leaders in business management and technology; they are industrialists and startup founders committed to the long-term growth of the Malabar industrial ecosystem. All of them have their origins in the Malabar region, and volunteer their time and efforts to promote the startup ecosystem,” says PK Gopalakrishnan, a Director of MiZone.
The main focus of the Malabar Innovation Zone is to generate employment via promotion of business opportunities by focusing on information technology relevant to the Indian context. This will consequently enhance the socio-economic development of the Malabar region.
MiZone is a new pathway to tap rural talent and utilise its potential for India’s growth. It accommodates incubators and accelerators, and provides basic amenities required for the growth and advancement of startups. The objective is to create yet another peer group of entrepreneurs, and help them accomplish their dreams.
Apart from Clootrack, MAN has invested in a Kochi-based foodtech startup FarmersFz, Kannur-based industrial consulting and research startup Btrac, and Chennai- based edtech startup Sp Robotics.
How the MiZone came into being
The Malabar angels had converted an old public sector undertaking called the Kerala Claves and modified it into an innovation zone, MiZone, which was inaugurated by Kerala Chief Minister Pinarayi Vijayan in February 2019. Kerala Claves was earlier a clay-making factory.
The incubation centre is spread across 23,000 square feet and houses 60 startups.
“Gradually, we are trying to build up mass, and also encourage mentorship sessions. We have technical sessions where we get experts from Bengaluru, Chennai, and other parts of the country to share expertise. Malabar Angel Network’s objective is to fund startups incubated in the innovation zone,” Gopal says.
The startups at MiZone represent different sectors, but mainly technology, applied technology, and various women entrepreneurs.
According to Gopal, there are about 20 to 25 angel investors in and around Kannur, and others in the Gulf and Bengaluru who are trying to fund innovative startups here.
High risk, high reward
Gopal admits to a dearth of angel investors in Kerala. “Firstly, Kerala is a small state. Secondly, the culture of risk out-take is prevalent,” says Gopal, adding, “People in Kerala are still conservative. (They would much rather) invest in a fixed deposit, land, or one’s own business rather than invest in a startup. People believe that there is risk involved. It is not easy for a Keralite to shed this conservative mindset. It will take time as it is a high-risk, high-reward game.”
Kerala Startup Mission also has a programme, Ignite, which helps HNIs and small and medium businessmen in Kerala understand angel investment.
The Malabar Angel Network is not the first set of angel investors in the state. The previous angel groups in Kochi and Calicut did not take off.
Gopal believes the reason was lack of preparation. “We are trying to put all our minds into building the pipelines: one for startups and one for angel investors. So, when startups enter, we don’t have a dearth of angel investment and vice versa."
Malabar Angel Network is also creating awareness about angel investment among communities and associations in and around Kerala.
“I think education and creating awareness have to go hand in hand as we identify startups. Right now, we need more angel investors, for sure. And there are enough startups which can be funded,” Gopal says.
The team is planning to conduct a road show in Dubai to attract expats to invest. It also has plans to join other pioneer angel networks in the state to form federations.
The Malabar Angel Network aims to invest in at least five to 10 startups every year over the next few years.
“Our average ticket size will be between Rs 15 lakh and Rs 1 crore. That is our current capacity, but it will increase as we gain experience. We will continuously encourage startups to come and visit MiZone,” Gopal says.
With an aim to form an ecosystem in the Malabar region, the network is also collaborating with engineering colleges, incubators, and accelerators in the state. The team aims to bring Malabar at par with Kochi in the coming years.
(Edited by Suruchi Kapur- Gomes)