Karnataka Government Unveils INR 20 Cr VC Fund for AVGC Startups

The Karnataka government has unveiled a new venture capital (VC) fund, called the KITVEN (Karnataka Information Technology Venture Capital Fund) Fund-4 (AVGC), dedicated to nurturing startups in the animation, visual effects, gaming, and comics (AVGC) sector. This INR 20 Cr fund aims to make initial investments ranging from INR 50 Lakh to INR 1 Cr per startup, with provisions for follow-on investments of up to INR 2 Cr. The funding structure includes equity, preference capital, debentures, or a combination of these financial instruments.

Emphasizing its commitment to fostering growth and innovation in the AVGC sector, the state government intends to utilise this fund exclusively for startups operating within Karnataka. The investment horizon for the startups in the fund’s portfolio is set between three to five years, with possibilities for shorter-term investments. This strategic move aligns with the government’s agenda of generating 30,000 new jobs in the AVGC-XR sector over the next five years, indicating a significant thrust towards employment creation and economic development in the state.

During the fifth edition of Bengaluru GAFX 2024, KITVEN’s CEO, PV Harikrishnan, announced the launch of the KITVEN Fund-4 (AVGC), underscoring the government’s vision for Karnataka to emerge as a preeminent global AVGC-XR hub. Chief Minister Siddaramaiah also expressed the state’s steadfast commitment to fueling the sector’s growth. The launch of this VC fund not only underscores the government’s support for the AVGC sector but also sets the stage for potential advancements and prosperity in the domain.

Established in 1999, KITVEN, which raises subscriptions from key bodies of the Karnataka government, previously raised KITVEN Fund-5, designed to invest in emerging sectors such as AI, medtech, and cleantech, with a target corpus of INR 100 Cr. This recent initiative is part of the state government’s renewed impetus towards nurturing the budding AVGC-XR industry. As per news agency PTI, the government also unveiled a dedicated AVGC-XR policy 3.0 in November 2023, solidifying its support for the sector’s comprehensive growth.