The Tamil Nadu government is making a significant move to bolster its burgeoning startup sector. During the Global Startup Summit in Coimbatore on Thursday, October 9, 2025, Chief Minister M.K. Stalin announced the establishment of a Co-Creation Fund, backed by a substantial allocation of ₹100 crore. This fund is specifically designed to invest in various venture capital funds, ultimately channeling crucial financial support to innovative startups across the state.
“This new initiative marks a pivotal step in strengthening Tamil Nadu’s already vibrant startup ecosystem,” stated Chief Minister Stalin. He further elaborated that the Co-Creation Fund will be expertly managed by the Tamil Nadu Startup and Innovation Mission, widely known as StartupTN. This strategic management ensures that the fund’s resources are deployed effectively to maximize impact.
Under this forward-thinking scheme, the government will strategically infuse capital into venture capital funds. These funds, in turn, will focus their investments on promising startups that are proudly based in Tamil Nadu. This is expected to spark the emergence of new venture capital firms within the state and significantly attract leading global investment players, fostering a dynamic and competitive investment environment.
During the summit, which was organized by StartupTN, Chief Minister Stalin highlighted Tamil Nadu’s success in attracting investments across both high-tech and labor-intensive industries. He reaffirmed the government’s ambitious commitment: “Our administration is tirelessly working towards transforming Tamil Nadu into a $1 trillion economy by the year 2030.”
Emphasizing the ‘Dravidian model’ of governance, the Chief Minister articulated the state’s industrial vision—to ensure that startup awareness and opportunities are accessible in every corner of Tamil Nadu. He stressed that new-age entrepreneurship initiatives must champion social inclusivity, reaching diverse communities including women, youth, marginalized groups, persons with disabilities, and transgender individuals. “At its core, the Dravidian model policy integrates social justice directly into our startup strategy,” he asserted.
Tamil Nadu’s Remarkable Startup Ascent
Tamil Nadu has witnessed an extraordinary surge in its startup landscape over the past four years. The number of registered startups on the Union government’s platform has skyrocketed six-fold, from a modest 2,032 to an impressive 12,000. Notably, half of these innovative ventures are proudly led by women entrepreneurs. This growth is particularly striking given that in 2018, Tamil Nadu languished at the bottom of Indian states for startup infrastructure. However, by 2022, the state had dramatically ascended to the top position, boasting one of the nation’s finest startup ecosystems. Further validating this achievement, the Global Startup Ecosystem Report 2024 by Startup Genome recognized Chennai as the 18th leading startup hub in Asia. Additionally, the Atal Innovation Mission, under NITI Aayog, has lauded Tamil Nadu as a model state for cultivating an exceptional innovation environment.
The state’s ability to attract investments has also seen substantial improvement in recent years. An Inc42 report indicates that the average investment secured by Tamil Nadu-based startups has grown from $1 million in 2016 to an impressive $6 million in 2024. This upward trend clearly demonstrates a surging investor confidence in the state’s entrepreneurial ventures. Between fiscal years 2020 and 2025, the number of DPIIT-recognized startups from Tamil Nadu boasted a remarkable Compound Annual Growth Rate (CAGR) of 36%, which is three times higher than the national average of 11%.
Reflecting this impressive growth, a dedicated budget of ₹20 crore has been allocated for startup development in the current financial year.
Furthermore, the government is committed to fostering inclusive entrepreneurship by providing equity investments to startups founded by entrepreneurs from Scheduled Castes and Scheduled Tribes. The allocation for this vital scheme saw a significant increase from ₹30 crore in 2022-2023 to ₹50 crore in 2023-2024. The TANFUND platform, launched just last year, has already successfully facilitated ₹129.24 crore in funding, underscoring its effectiveness in mobilizing capital.
The Global Startup Summit itself was a grand success, drawing over 250 participants from more than 40 countries. A testament to its international appeal, startups from 21 nations showcased their innovations in dedicated pavilions at the exhibition, fostering global collaboration and investment opportunities.