A group of foreign investors have lined up to invest $500 million in the state of Maharashtra in a bid to make the region a tech hub, in a move aimed at tapping into the region’s nascent startup scene.
The group, headed by Mumbai-based private equity firm Sequoia Capital, has put forward a $500-million proposal to build an incubator that will help startups create and launch businesses.
The group, which has raised $250 million in venture capital in India, is expected to raise a further $300 million by the end of the year.
In a statement, Sequoial Capital said it would partner with Mumbai-headquartered Aditya Birla and its Mumbai-focused Adityasari Foundation to build a network of incubators and other startups to nurture India’s next-generation start-ups.
“This initiative will give the state and its companies a platform to connect with the emerging talent, to promote and grow their businesses and the economy, and to create jobs and create jobs,” the statement said.
“We are committed to creating an environment conducive to the success of this group and will work with Adityah to make it happen.”
The group has been looking for a home for the project since it was announced in April and has received backing from investors including Fidelity Investments, The Goldman Sachs Group, and State Street.
It also has some backing from the Tata Group.
“The Mumbai-centric ecosystem in Maharashtra will play a vital role in the future of India’s technology sector,” Tata Group chairman and chief executive officer Cyrus Mistry said in a statement.
“The Maharashtra model offers an ideal place to establish new business models and a model of incubation and startup support.”
The state has been lagging behind in terms of technology development in the past, as only six of the nation’s 26 districts have a start-up incubator, according to the National Startup Network (NSN).
However, that is changing, with the government having invested in the startup sector, setting up incubators in many parts of the state, and setting up the National Start-Up India (NUSI) in 2017.
The state also has a nascent tech scene, with several start- up accelerators offering mentorship and other opportunities for students and professionals.
Adityasri Foundation, which launched the Adityavar Project last year, aims to create a network for the state’s startups and to promote the startup culture in the country.
“In the last three years, Maharashtra has witnessed a remarkable rise in the number of start- ups, which will become the next pillars of the local economy,” said Manish Gupta, Adityabari Foundation’s founder and managing director.