“We are a four-and-a-half-year-old startup state,” Nara Lokesh reiterates at every turn. He is the IT minister for Andhra Pradesh, a state which boasts of a thriving startup ecosystem that it hopes can attract considerable attention from global innovators and investors.
Since Telangana was carved out in 2014 and a new government took over in Andhra Pradesh, the state has gone all out to become a favoured investment destination across segments including startups.
The state government already has a Rs 100 crore fund to invest in early-stage companies with plans to grow it to Rs 500 crore with the help of private investors. And earlier this week, chief minister Chandrababu Naidu said he wanted to turn Andhra Pradesh into one of the world’s top three fintech centres.
In an interaction with TechCircle on the sidelines of the state government-organised Vizag Fintech Festival 2018, Nara spoke about how the government plans to make its ambitions a reality and said that the coastal city of Visakhapatnam will become the Silicon Valley of India in the next five years.
Why was fintech chosen as the base to build the state’s startup ambitions?
Fintech is part of the fourth industrial revolution. With every industrial revolution - from 1.0 to 3.0 - more jobs get created. Financial technology solutions are core to almost every internet business while traditional businesses, not just banking and insurance, are also looking to reap the benefits of fintech.
With the growing usage and implementation of emerging technologies like blockchain, artificial intelligence, machine learning, we are talking about creating next-generation jobs. That has been the biggest focus for this state.
We believe that Andhra Pradesh is better positioned in this journey than any other state in India for two reasons – firstly, there’s a government that’s very proactive and secondly, there’s an entire ecosystem that’s already in place to take us to the next level.
My biggest focus now is interacting with the top 20 unicorns globally and bringing them to Visakhapatnam,
What is the government’s view on creating a startup-friendly regulatory environment?
As I always say, we are a four-and-a-half-year-old startup state. We are very agile, nimble and adaptive to macro conditions. Regulation always follows innovation, not the other way around.
I’m very clear about the fact that regulation should not be an obstacle for innovation. We are always thinking about ways to better support and enhance innovations. We want to create a regulatory sandbox where companies can work with the government and startups can grow to the next level.
There already are a number of established startup cities across the country. What is your strategy for making Visakhapatnam the most sought-after startup destination in India?
I cannot compete with mature startup ecosystems like Bengaluru. We are trying to design different methods for building a startup ecosystem here.
Firstly, we are putting our money into creating a strong mentor base through programmes such as College Connect. I’m trying to attract successful entrepreneurs to go back to schools and colleges to inspire the next generation of entrepreneurs.
Secondly, we are working relentlessly to give an outlet to these entrepreneurs through programmes like hackathons. Promising ideas emerging out of these initiatives will be showcased to the world to attract global investments.
Also, we as a state are exploring ways to invest in these ideas and work with them closely. We already have a Rs 100-crore startup fund and we are looking to beef it up.
In addition, we are also working with organisations and associations in multiple global startup locations such as Bay Area, Israel, Singapore, and Hong Kong to enable cross-border interactions and exchanges. The idea is to take our young entrepreneurs from here to these global startup hubs to give them exposure.
My quest is to make innovation a way of life and take that culture to the grassroots across the state. I don’t believe in setting up fancy accelerators, I would rather put my money behind mentors, kids in colleges or in programmes like (central government innovation initiative) Atal Tinkering Labs.
How will you attract angels and venture capital firms to Andhra Pradesh?
I believe it all starts with the cohorts system. We are very focused on creating quarterly cohorts to build a proper funnel for startups to come in and have pitch competitions.
A lot of angel investors and venture capitalists are coming to the state to participate and evaluate the startups in these sessions. I’m sure they will open their cheque books as the ecosystem evolves and matures. That’s the beginning and our focus is to enable that process. We will further back this up with mentorships.
As mentioned, we already have a startup fund and we are also looking at investing in a fund of funds and doing other direct investments. We are seeing interest from funds of all sizes and different types. Our effort is to create a promising ecosystem for them to come to Andhra Pradesh and invest in our startups.
We know the success of any startup ecosystem is dependent on a strong flow of global talent. The focus with initiatives like the Vizag Fintech Festival is to attract global companies to the state. I’m confident that in the next five years, Visakhapatnam will be the Silicon Valley of India.