Karnataka launches Rs. 20 crore VC fund to boost AVGC sector growth

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The Animation, VFX, Gaming, and Comics (AVGC) sector, the Karnataka Information Technology Venture Capital Fund (KITVEN) has officially unveiled a dedicated Venture Capital (VC) fund with an impressive Rs. 20 crores. The announcement was made by P V Harikrishnan, the CEO of KITVEN Fund, during the “Investor Speak – Strategies for Staying Relevant and Resilient in the Indian Gaming Startup Ecosystem” panel at the Fifth Edition of Bengaluru GAFX in 2024.

This pioneering initiative, made under the protection of the Department of IT, Bt & ST, Government of Karnataka, is strategically designed to invest in companies within the state that contribute to Animation, Visual Effects, Gaming, and Comics. In a historic move, Karnataka has become the first state in India to establish a fund specifically tailored to foster the growth of the AVGC sector.

VJS Srivastav, Secretary General at the Skill Online Games Institute, lauded the move, stating, “Karnataka has always been a pioneer, and with this launch, the state has become the first in India to set up a fund to encourage the AVGC sector. This is a recognition of the potential in the AVGC sector and especially the enormous potential of online games for innovation and employment generation. Students and aspirants in the AVGC sector can make use of this opportunity to make their start-up dreams a reality!”

During the Bengaluru GAFX 2024 session, Kislay Shashwat, Principal VC at Lumikai, expressed his appreciation for the Government of Karnataka’s proactive role in nurturing the AVGC sector. He said, “The launch of the KITVEN Fund-4 AVGC represents a significant step towards fostering innovation and development in this field. This initiative not only highlights the government’s commitment but also paves the way for potential growth and advancement in the sector.”

Vivek Ramachandran, a VC from Matrix Partners and visiting faculty at the National Institute of Design, welcomed the move, encouraging aspiring students and ideators to utilize this opportunity to pursue their startup dreams.

The KITVEN Fund-4 (AVGC) is poised to play a transformative role in supporting startups and innovation in Animation, Visual Effects, Gaming, and Comics, thereby solidifying Karnataka’s position as a leader in the AVGC sector. Investments in firms will take various forms, such as equity, preferred capital (convertible/redeemable), debentures, or a combination, following the guidelines published by the Securities and Exchange Board of India (SEBI). The fund aims to consider shorter time frames while maintaining a normal investment horizon of three to five years. This initiative sets the stage for a new era of growth and advancement in the AVGC sector, with Karnataka at the forefront of fostering innovation and supporting startups.