The Indian startup industry has been witnessing a sea change for the past couple of years with many leading companies acquiring promising startups; investing in technology; and encouraging many startups with incubation facilities and seed funds.
The India Startup Report 2014, a study by Nasscom, the IT industry body, says: “While the total number of software product startups in India currently stands at 3,100, the third highest in the world after the US and UK, it is projected to grow to 11,500 startups by 2020, employing over 2,50,000 people as against the existing 75,000.”
Sensing the huge growth and potential, MNCs are now focusing on startups by providing platforms to encourage startups; show them the way forward, and also helping by connecting them with venture capitalists.
Wells Fargo and Company introduced the Wells Fargo Startup Accelerator, a semiannual boot camp for innovators, last year, by inviting applications. Innovators who apply for the programme collaborate on their ideas in areas such as payments, mobile, cyber security, among others. Selected companies are chosen for a six-month programme in which Wells Fargo will make direct equity investment.
“We launched the programme in October last year and have received close to 300 applications. We have invested in three early-stage US companies — Bracket Computing; Context 360; and MotionSavvy. Our programme is a global programme and not restricted to one particular region. We are seeing interesting companies from India,” said Bipin Sahni, senior vice-president (innovation, research and development) Wells Fargo and Company.
Wells Fargo India Solutions is an indirect subsidiary of Wells Fargo Bank, a diversified financial services company. The San Francisco-based bank recently commenced its spring 2015 programme. “The number of applications Wells Fargo has received in the second phase of the programme, which ended on June 20, is 177 and of them 17 are from India. We are looking for innovative companies that can add value to our business and our customers,” said Bipin, adding $50,000 to half a million are invested in each entity. When asked about any particular target they have set, Bipin said, “We don’t have any target. But in the next three or five years we want a good set of companies to be part of our portfolio.”
Startups face escalation challenge
Microsoft Ventures started its ‘Microsoft Ventures Accelerators’ in 2012. It gradually added other programmes to help startups at different stages of their journey. It launched Accelerator Plus and Scale Up — for later-stage startups —and HiPo (for startups raising series funding)
“We recently announced a new programme for corporate engagements called Innovation for Corporates Initiative (ICI),” said Ravi Narayan, director of Microsoft Ventures.
Starting from 2012, Microsoft Ventures in India has built a portfolio of 74 startups. “We have seen an impressive $5,00,000 average funding and four exits till date,” informed Ravi.
The Accelerators are at Bengaluru in India, Beijing, Berlin, London, Paris, Seattle, and Tel Aviv. One of the biggest challenges that startups face is escalation, he says. Accelerator programmes help startups transform into stronger businesses. Through the course of the programme, the company aims at getting the startups maximum traction through strategic interventions. “Weekly meetings are held with the Accelerator team to assist startups in identifying goals and weak areas, among others,” explains Ravi.
India, a viable market
Sunil Varhadkar, who has been mentoring startups right from the commencement of Microsoft Ventures Accelerators, says these startups come with sound technical knowledge. “We help them in business overview and investors expectations and also looking at long-term perspective,” says Sunil.
Ravi says the startup industry has the potential to grow into something much greater, given the right environment. “There has also been a shift in the kind of startups coming out of India now. Until few years ago the Valley startups, even the ones with Indian founders, looked at the Indian market as merely a source of backend support for their tech development teams. The idea of India being a potential marketplace for their products wasn’t prevalent, either. But now, India is being looked at as a viable market, not only to sell products to, but also support it worldwide,” he said.
One of the first batches to get trained in the Accelerator programme was HealthifyMe. Its CEO and co-founder Tushar Vashisht said, “We were at a very early stage back then, and the training helped us bring in better execution discipline.”
Search giant Google launched ‘Google for Entrepreneurs’, where entrepreneurs come to learn, share ideas and launch great startups. It has campuses at Tel Aviv, London, Seoul, Madrid, Warsaw, and Sao Paulo. In India, Google for Entrepreneurs is the founder partner in the 10,000 startups movement, by Nasscom to scale up the startup ecosystem in India by 10x. Another company Citix too has a programme for startups called Citrix Startup Accelerator. Citrix delivered successful programmes in Silicon Valley and Bengaluru last year, and last month, launched the programme in Santa Barbara, California, and will launch the same in Raleigh, NC, in September this year.
While there are corporate accelerators like Google and Microsoft, there are independent accelerators like Y Combinator, Techstars and DreamIt Ventures that nurture these startups to bring in new ideas and technologies.