A strong push to decentralise Karnataka’s startup ecosystem is taking shape, with the state preparing to launch a dedicated local innovation fund to support emerging cities such as Mangaluru.
The proposed fund, sized at ₹70–75 crore, will be backed by the Karnataka government along with private venture capital firms and high-net-worth individuals, according to sources. The initiative aims to improve access to early-stage capital in regions that have historically seen far less institutional funding than Bengaluru.
Speaking at TiEcon Mangaluru 2026 on January 15, Accel India founding partner Prashanth Prakash said a local fund focused on the region will soon be rolled out. “We will soon have a local fund here in Mangaluru, where we will look at investing around ₹20 crores. The fund is aimed at improving access to seed capital for startups based in regions that have seen limited institutional funding compared to Bengaluru,” he said.
The panel discussion, moderated by Rohith Bhat, president of TiE Mangaluru, centred on building startup ecosystems beyond Bengaluru and strengthening access to capital and infrastructure in non-metro regions of the state.
Prakash added that the Alternative Investment Fund has received approvals from market regulator SEBI and is expected to launch shortly. He said the structure of the fund will enable participation from multiple entities, helping to reduce risk for individual investors.
Highlighting the role of global capability centres, Prakash said, “GCCs are great. Within the next 24 months, we should aim to get 50–60 world-class GCCs. Once talent is retained here, all the digital and infrastructure rails are no different from Bangalore.”
He also pointed to capital concentration in the state capital, noting, “Of the top 100 VCs today, 80 are based in Bangalore. Nearly 70–80% of overall early-stage capital comes from VCs in Bangalore. There is a much stronger foundational entrepreneurial mindset there.”
The ecosystem, he said, must now focus on hardware, AI, and deep tech. Institutions such as ARTPARK and C-CAMP were encouraged to consider satellite centres in Mangaluru.
Mohandas Pai, chairman of Aarin Capital and co-founder and former CFO of Infosys, stressed the importance of infrastructure planning. “We need space in Mangaluru, and that needs to be planned. Infrastructure planning is key,” he said. He also urged investors to engage local family offices and educate them about technology investments.
Devdutt Yellurkar, general partner at Charles River Ventures, said Mangaluru already has strong entrepreneurial depth. “You require entrepreneurship. The ability to take risk in Mangalore is fantastic,” he said.
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