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Why Is Tamil Nadu Becoming The Thalaiva State For Startups?

Tamil Nadu is attracting startups in India with its initiatives like Olir. The state government recently launched 3 Centres of Excellence which will be available to startups at optimal costs, enabling them to grow faster with state-of-the-art technology.

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Swati Dayal
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The southern state of Tamil Nadu has always been known for its rich cultural heritage, iconic Thaillaivas of Tamil cinema, and a thriving manufacturing industry. However, in recent years, the state has emerged as a hotbed for startupreneurs, with a growing number of entrepreneurs choosing to set up their businesses in Tamil Nadu. Thanks to the conducive environment that the state government is providing these young businesses.

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The state's vibrant startup ecosystem has been fuelled by several factors, including the continuous initiatives being taken by the state government to support the otherwise naïve startups.

Startups Keen to Collaborate With Tamil Nadu

Recently, the  Tamil Nadu Government said that in a recent event as many as 25 startups in the state have expressed keen interest to sign Memorandum of Understandings (MoUs) with the Centres of Excellence established under state’s ‘Olir’ initiative.

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Representatives from nearly 250 companies across various sectors, including advanced manufacturing, robotics, e-commerce, aerospace and defence, agricultural technology, participated in an event held recently.

One of the key reasons why these startups have been attracted to the state is Olir (shine).

Centres of Excellence For The Startups – Booster Doze

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The three Centres of Excellence, namely Tamil Nadu Smart and Advanced Manufacturing Centre (TANSAM), Tamil Nadu Centre of Excellence for Advanced Manufacturing (TANCAM), and Tamil Nadu Advance Manufacturing Centre of Excellence (TAMCOE), were inaugurated by Chief Minister M K Stalin in 2022.

These centres act as a booster doze for the startups as they provide them with the know-how to accelerate their design, prototyping and development testing.

Additionally, the availability of such facilities at 'optimal costs' reduces the financial burden on startups and encourage more entrepreneurs to set up their businesses in Tamil Nadu. Overall, the Centres of Excellence help Tamil Nadu become a global startup destination.

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What is Olir?

Launched in 2022, Olir is an initiative of the Tamil Nadu government to promote startups in the state. The government hopes that the Olir initiative will strengthen the startup ecosystem of Tamil Nadu and make it a global startup destination.

The startups under the state government's 'Olir' (shine) initiative would be able to grow faster by utilising the state-of-the-art multi-sector Industry 4.0 Centres of Excellence (CoE). The CoEs, which has been established by the Tamil Nadu Industrial Development Corporation (TIDCO) and Tamil Nadu Startup and Innovation Mission (StartupTN), will be available to the startups at 'optimal costs'.

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How will Olir Help Startups? Officials Speak

S Krishnan, Additional Chief Secretary of the Industries Department, said the initiatives like Olir would help in improving intra-connect within government departments and inter-connect with the private sector, resulting in better outcomes for all stakeholders.”

Jayashree Muralidharan, Managing Director of TIDCO, highlighted the importance of startups in sustaining the industrial leadership position of Tamil Nadu.

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StartupTN Mission Director and CEO Sivarajah Ramanathan talked about the various initiatives of the state government through StartupTN to strengthen the startup ecosystem and make Tamil Nadu a global startup destination. He said that the launch of Olir has been well received, the exposure visits from such enterprises to the Centres of Excellence will further strengthen the startup ecosystem of Tamil Nadu.

After the inauguration, the founders and CXOs of startups were given a tour of TANSAM, TANCAM, TAMCOE, and TICEL Biotechnology Core Instrumentation Facility.

More Centres of Excellence on Anvil

The Coimbatore District Small Industries Association (CODISSIA) will partner with TANCAM and TANSAM to establish Centres of Excellence. The Centres will be based on a hub and spoke model, with the main Centres in Chennai and satellite Centres located in manufacturing clusters. TANCAM will focus on augmented and virtual reality, while TANSAM will offer services related to industry 4.0, simulation, and three-dimensional printing. An application is this regard is being submitted to the District Industries Centre to set up a Centre of Excellence jointly with TANSAM. The total project cost for each Centre is estimated at Rs 7.5 crores.

The Game-changing Startups of Tamil Nadu

In the 2022-23 edition of the Startup Ranking Report released by the Department for Promotion of Industry and Internal Trade (DPIIT), Tamil Nadu was ranked third among all states and union territories in India, after Karnataka and Maharashtra. The ranking is based on various factors such as the number of startups, funding, policy initiatives, infrastructure, and overall environment for startups.

Tamil Nadu has been steadily climbing the ranks in recent years, thanks to the state government's various initiatives to support startups. The state's flagship startup initiative, 'StartupTN', has been instrumental in creating a thriving ecosystem for startups in the state. StartupTN provides funding, mentoring, and networking opportunities to startups, and has helped over 200 startups in the state.

Tamil Nadu's startup scene is diverse, with companies operating in a range of sectors, from e-commerce and healthcare to fintech and clean energy.

Tamil Nadu’s Startup Revolution

According to the latest data, Tamil Nadu is home to over 8,000 startups, making it the second-largest startup ecosystem in India, after Karnataka. The state has witnessed 1.7 times increase in the number of startups in the last five years, which is a testament to the  growing entrepreneurial spirit in the region.

Tamil Nadu is also home to some of the most successful unicorns in India, with several startups crossing the coveted billion-dollar valuation mark in recent years. Chennai-based Freshworks, a cloud-based customer engagement software company, is one of the most notable unicorns from Tamil Nadu, with a valuation of over USD 3 billion. Another successful unicorn from the state is Zoho, an enterprise software company, which is valued at over USD15 billion.

Tamil Nadu has emerged as one of the leading states in India's startup ecosystem, with a flourishing ecosystem that is attracting entrepreneurs from around the world. The state government's efforts to create a conducive environment for startups have borne fruit, and the state has moved up in the rankings in recent years.

With a growing number of startups choosing to set up their businesses in Tamil Nadu, the state is well on its way to becoming a leading destination for startupreneurs in India.

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