Karnataka issues order for Rs 25 cr ‘Government First’ initiative to support 100 startups

Karnataka issues order for Rs 25 cr ‘Government First’ initiative to support 100 startups

Karnataka government on September 30 issued an order launching Rs 25 crore ‘Government First’ initiative under its Startup Policy 2025-30 to help startups test and validate their innovative solutions and take successful products towards government procurement.

The initiative, approved for three years, is expected to support up to 100 startups by positioning the government as an early adopter and potential first customer for solutions that demonstrate measurable value in real-world public-sector environments.

The programme will be implemented through Karnataka Innovation and Technology Society (KITS) under Department of Electronics, Information Technology, Biotechnology and Science & Technology.

Moneycontrol had first reported on this initiative in June 2024.

Also, read: Karnataka to empanel 100 startups for 'preferential market access' in govt tenders

Home, Information Technology, Biotechnology and E-Governance Minister Priyank Kharge said the initiative would take Karnataka’s startup support framework a step further by creating a pathway for innovations to move from development to real-world public applications.

“With Government First Initiative, Karnataka is taking ELEVATE a step further by creating a clear pathway for startups to take their innovations from the lab to real-world public applications,” Kharge said.

The initiative introduces a structured ‘test-validate-procure’ framework under which government departments can identify operational challenges and invite startups to develop solutions.

Startups can also proactively submit deployment-ready solutions to address government requirements through a Startup-Initiated Route. This means they need not wait for a department to issue a specific problem statement before approaching the government.

Selected solutions will undergo technical evaluation before being deployed in government environments for pilot testing. Their performance, scalability, cost efficiency and impact on service delivery will be assessed before procurement and wider adoption.

Solutions that demonstrate successful outcomes in one department can also be considered for adoption by other government departments.

Eligible startups can receive funding of up to Rs 25 lakh for pilot implementation and validation. The total programme allocation is Rs 25 crore, of which Rs 23.75 crore, or 95 percent, has been earmarked for startup assistance. The remaining Rs 1.25 crore will be used for administrative and operational expenses.

The government has set a target of onboarding 100 startups during the programme period, with annual targets of 16 startups in 2026-27, 33 each in 2027-28 and 2028-29, and 18 in 2029-30.

Also, read: Karnataka to release rules for Rs 200-crore startup fund, launch Nipuna Edge AI skilling programme: IT Secretary

Startups with deployment-ready solutions may also receive direct work orders of up to Rs 25 lakh, subject to technical evaluation, validation and demonstrated performance.

To qualify, a startup must be registered as a Karnataka startup, be less than 10 years old and have an annual turnover of not more than Rs 200 crore in any financial year since incorporation.

The startup must demonstrate innovation and scalability and comply with applicable technical, regulatory and sector-specific certification requirements. The guidelines specify a Technology Readiness Level of 7, indicating that solutions should have been validated in operational environments and be ready for real-world testing.

The programme covers goods, services and integrated solutions across areas including artificial intelligence, information technology, data analytics, digital governance, healthcare, agriculture, education, mobility, consulting, design and logistics.

The initiative will operate through a three-tier mechanism comprising a Selection Committee, Technical Committee and Review Committee.

Selection Committee will assess technical feasibility, innovation, applicability, readiness, pilot outcomes and costs. Technical Committee will oversee implementation, compliance and milestone certification, while the Review Committee will handle financial approvals and fund disbursement. Applications will be evaluated through quarterly cycles.

Startups retain intellectual property

The guidelines provide for 25 percent of the approved payment to be released upon issuance of the work order, with the remaining 75 percent payable after the user department issues a completion certificate.

Intellectual property ownership will remain with the startup unless otherwise agreed by both parties. Standardised contracts and legal templates will also be used to simplify the procurement process.

The government plans to make key procurement information publicly accessible through a dashboard, including work orders, startup success stories and annual reports on startups engaged and the value of work orders issued.

The initiative is aimed at creating market access for Karnataka startups while enabling government departments to test and adopt technologies that can improve public service delivery.

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