Karnataka’s ₹150 Crore Deep-Tech Push: ELEVATE NxT, Beyond Bengaluru Fund, and a Vision for 25,000 Startups
Karnataka has long been India’s undisputed startup capital, home to nearly 50 of the country’s 118 unicorns and over 18,000 registered startups—accounting for 15% of all DPIIT-recognized startups in India . But as the state looks to the future, the focus is shifting decisively from consumer internet to deep-tech.
In January 2026, the Karnataka government officially launched its Startup Policy for 2025-2030, a five-year roadmap with an outlay of ₹570.68 crore . The policy targets the creation of 25,000 new startups by 2030, with at least 10,000 emerging from regions outside Bengaluru .
The message is clear: Karnataka’s next growth phase will be driven by Artificial Intelligence, Quantum Computing, Electronics, and other frontier technologies—and it will not be confined to the state’s capital city .
ELEVATE NxT: A ₹150 Crore Bet on Deep-Tech
The centrepiece of Karnataka’s deep-tech push is ELEVATE NxT, a flagship programme launched under the state’s Local Economy Accelerator Program (LEAP) . With an earmarked corpus of ₹150 crore, the initiative is designed to identify and support high-impact deep-tech startups across India .
Key Features of ELEVATE NxT:
| Feature | Details |
|---|---|
| Total Corpus | ₹150 crore |
| Grant per Startup | Up to ₹1 crore |
| Funding Model | Milestone-based disbursement |
| Eligibility | Open to deep-tech startups across India |
| Evaluation | Multi-stage, rigorous jury process |
| TRL Requirement | Level 3 to 8 with supporting evidence |
The programme targets startups leveraging advanced technologies including Artificial Intelligence, Machine Learning, IoT, Blockchain, AR/VR, Robotics, 3D Printing, Drones, Biotechnology, Quantum Computing, Cybersecurity, Green Energy, and SpaceTech .
Priority Sectors under Elevate NxT:
- Quantum Technologies
- Generative AI
- Semiconductors & Microelectronics
- Space & Satellite
- Aerospace and Defence
- Health/Bio/Lifesciences
- Energy & Climate
- Cybersecurity
- Industrial Automation
The evaluation process is designed to be rigorous and transparent. Startups undergo a multi-stage process: initial data sufficiency check, masked Level 1 evaluation of deep-tech credentials, in-person pitching Round 1, and a Grand Finale . Notably, in the first round, pitches are anonymised—founders cannot include company name, logo, or any identifying information—ensuring that evaluation is based purely on technology merit .
A critical requirement for out-of-state winners: they must relocate their Registered Office to Karnataka within four months of being declared winners . This ensures that the benefits of the programme—jobs, tax revenue, ecosystem activity—accrue to the state.
Beyond Bengaluru: Decentralising Innovation
Perhaps the most significant strategic shift in Karnataka’s new policy is the explicit focus on building startup ecosystems beyond Bengaluru.
The Beyond Bengaluru Cluster Seed Fund
The government has established a ₹75 crore cluster seed fund, with an initial ₹20 crore commitment from the state . Phase I will focus on Mysuru, Mangaluru, and Hubballi-Dharwad, with additional clusters to be added later .
The fund will make equity and equity-linked investments starting at ₹50 lakh per startup, capped at 10% of the fund’s investable corpus per investment . Eligible companies must be government-registered startups operating in IT, electronics, semiconductors, biotechnology, or animation and gaming.
The IT-BT Policy 2025-2030 Incentives
The state’s new IT-BT policy offers compelling financial incentives to encourage startups to move beyond Bengaluru :
| Incentive | Benefit |
|---|---|
| Office Rent Reimbursement | 50% reimbursement, capped at ₹2 crore |
| Property Tax Relief | 30% relief for three years |
| Talent Relocation | Up to ₹50,000 per employee |
| Electricity Duty | Full waiver for five years |
| Telephone/Internet Rebate | 25% rebate, up to ₹12 lakh |
| R&D Reimbursement | 40% reimbursement, up to ₹50 crore |
The government has earmarked ₹960 crore to back this decentralisation vision over the next five years . The target is ambitious: at least 5,000 of the 30,000 startups by 2030 should emerge from outside Bengaluru .
Real-World Validation: Mysuru’s Success
The strategy is not without precedent. Similar efforts in Mysuru have already shown results, with over 30,000 employees currently working across nearly 100 IT companies in the city due to sustained encouragement for the information technology sector . Former ISRO Chairman Sreedhara Panicker Somanath has even proposed developing Mysuru as India’s “startup laboratory,” where startups can co-create with research labs .
Strengthening the R&D Pipeline: Centres of Excellence
Deep-tech cannot be built on software alone. It requires research infrastructure, collaboration between academia and industry, and a pipeline from lab to market. Karnataka is addressing this through multiple initiatives.
Centre for Applied AI for Tech Solutions (CATS)
In January 2026, the state approved the establishment of an AI Centre of Excellence in Bengaluru in partnership with NASSCOM . The ₹20 crore project, named the Centre for Applied AI for Tech Solutions (CATS) , will be funded over four years by MeitY and the state government, with industry partners contributing as well .
CATS will focus on priority areas including AI, robotics and automation, supply chain optimisation, and digital transformation. The facility plans to establish advanced laboratories and testing facilities, support deep-tech startups, and facilitate proofs-of-concept, industry collaborations, and technology commercialisation .
IT/BT Minister Priyank Kharge captured the ambition: “This is the state’s deeptech decade. By bringing government, academia, and industry together, we are building a pipeline from research to market-ready solutions” .
Global Capability Centre Expansion
Beyond startups, Karnataka is aggressively expanding its Global Capability Centre (GCC) ecosystem. The state currently hosts 550 GCCs and plans to establish 500 new GCCs by 2029, a move expected to generate nearly $50 billion in economic output and create about 3.5 lakh (350,000) jobs .
An IT park will be developed in Mangaluru through KEONICS to attract global companies and promote GCC development . The state is also witnessing the rise of ‘nano GCCs’—agile, innovation-led centres often based in smaller cities—which complement the growth of larger captive centers .
Startup Vision Group: Charting the 2026-27 Roadmap
On April 7, 2026, Karnataka’s Startup Vision Group held its eighth meeting in Bengaluru to outline priorities for the coming year . The discussions focused on accelerating growth in deep-tech sectors, expanding the startup ecosystem beyond Bengaluru, strengthening funding mechanisms, and enhancing policy support .
Prashant Prakash, Vision Group Chairperson and founding partner at Accel, noted: “Karnataka has built one of the strongest startup ecosystems in India, and the next phase of growth will be driven by deep tech innovation, stronger industry-academia collaboration and expansion into emerging regions” .
Key priorities for 2026-27 include:
| Priority Area | Specific Actions |
|---|---|
| Centres of Excellence | Expand CoEs in AI, quantum computing, and electronics; adopt hub-and-spoke model to extend capabilities to emerging cities |
| Tier-2/3 Activation | Drive startup activity through district-level hackathons, bootcamps, and targeted interventions |
| Funding Enhancement | Strengthen Elevate programme; roll out “Elevate Next” with higher-value funding, faster disbursement, and improved monitoring |
| Policy Framework | Enhanced patent support, international market access, R&D grants, internship support, employer contribution reimbursements |
| Data Governance | Build data-driven governance systems to track startup growth and outcomes |
| Infrastructure | Expand incubation and co-working infrastructure across the state |
| Global Partnerships | Deepen global partnerships to position Karnataka as a global innovation hub |
N Manjula, Secretary of the IT/BT Department, added: “The government is focused on creating a more accessible and inclusive startup ecosystem across the state, with targeted interventions to support founders at every stage of their journey” .
The ELEVATE 2025 Results: A Baseline of Success
The launch of ELEVATE NxT builds on the success of the previous ELEVATE programme. At the January 2026 launch event, the state recognised 146 startups under ELEVATE 2025, committing total grants of ₹38.85 crore .
The winners included:
- 103 startups under ELEVATE 2025
- 33 startups under ELEVATE Unnati
- 10 startups under ELEVATE Minorities
Significantly, 43% of the selected startups were women-led and an equal proportion were based outside Bengaluru . This demonstrates that the state’s efforts to promote inclusive and decentralised innovation are already yielding results.
What This Means for Startups
Karnataka’s deep-tech push creates multiple opportunities for founders at different stages:
For Early-Stage Deep-Tech Startups:
- Apply for ELEVATE NxT grants of up to ₹1 crore
- Access the Beyond Bengaluru Cluster Seed Fund for equity investment
- Leverage the AI Centre of Excellence for prototyping and testing
For Startups Outside Bengaluru:
- The IT-BT policy incentives make Tier-2 cities financially attractive
- The cluster seed fund provides dedicated capital for Mysuru, Mangaluru, and Hubballi-Dharwad
- Nano GCCs and expanding IT infrastructure create new opportunities for B2B startups
For AI and Deep-Tech Founders:
- CATS provides access to advanced laboratories and testing facilities
- Industry-academia collaboration pathways are being strengthened
- Global partnerships are being expanded to provide international market access
For Investors:
- The state’s commitment to deep-tech creates a pipeline of capital-efficient, IP-rich ventures
- Co-investment opportunities through the cluster seed fund
- Policy stability through the 2025-2030 framework
The Road Ahead
Karnataka’s deep-tech push is not merely a policy announcement—it is a comprehensive, multi-year strategy backed by significant financial commitment. The state has identified deep-tech as the engine of its next growth phase and is building the infrastructure—funding, incubation, research facilities, and decentralised clusters—to support it.
The targets are ambitious: 25,000 new startups by 2030, 10,000 from beyond Bengaluru, 500 new GCCs, $50 billion in economic output. But the state has the track record to back its ambition. Karnataka already leads India in deep-tech, AI, and quantum technologies, supported by world-class institutions and forward-looking policies .
As the “Deep-Tech Decade” unfolds, the message for founders is clear: Karnataka is not just open for business—it is actively building the ecosystem for the next generation of science-led, globally competitive ventures.
