Kerala’s moment: Five lessons from IvyCap’s Vikram Gupta on turning talent into scale

Kerala has long been considered a potential hotspot for startups, but its future was recently illuminated by Vikram Gupta, founder and managing partner of IvyCap Ventures. Gujarati delivered a keynote titled "Kerala’s Moment – From Talent to Scale" at Huddle Global 2026 in Kovalam, highlighting the progress made so far and the challenges that still lie ahead. Here are some key takeaways from his address:

1. Kerala has become a hub for talent and capital. According to the RBI's latest remittances survey, Kerala received 19.7% of India's inward remittances in 2023-24, making it the second-largest recipient after Maharashtra. This money, which typically goes towards family maintenance and savings, could be channeled into a professionally managed endowment fund that would provide long-term capital for the ecosystem. However, this requires governance and patience, as family income is not idle risk capital.

2. The most critical funding gap is between years three and five. While many startups are achieving some level of success in the early stages, only a handful manage to scale to genuine success. Gupta identified several gaps that contribute to this issue, including a lack of CSR and grant money, difficulty in securing first anchor customers, and mismatches between the timelines of capital and technology. Deeptech companies, in particular, face significant challenges in accessing funding.

3. Domestic institutional capital is essential for scaling startups. The Indian VC market is crowded, and capital remains scarce at certain stages. Gupta called for increased investment from pension pools, the government's INR 1 lakh crore (about US$11 billion) Research, Development and Innovation (RDI) scheme, and other strategic investors. He argued that these funds, which have long-term horizons and low interest rates, could play a strategic role in supporting startups through their early years.

4. Building clusters around research is crucial for innovation. Gupta noted that the US and China have built their innovation hubs around universities and research institutions. Kerala has the potential to host several such hubs, particularly in AI, climate, food, and health. A well-designed pipeline that connects research institutions, translation funding, and hands-on support is essential for driving deep tech innovation in the region.

5. AI has transformed the cost of competing and increased the importance of capital efficiency. Gupta emphasized that AI has lowered the barrier to entry for many industries, making it cheaper to build and copy products. In response, investors are looking for companies that demonstrate capital efficiency and credible business models. Gupta warned that hype will not be enough to secure investment; founders must be able to show investors how their capital will be used effectively to create a defensible product or service.