Corporates and HNIs are stepping in to boost the ecosystem, as they realise the value of being at the forefront of innovation, says the author
The author Ashish Jhalani is the Founder of e-Tailing India.
India has become the melting pot of new-age entrepreneurs, with over 3,100 startups now operating in the country. The number is expected to touch a whopping 11,500 by 2020! The combined might of our startup industry is now ranked fifth on the global scale, where it is only behind nations like the US, Europe, Canada and China.
Realising the need to give momentum to this startup revolution in India, the SEBI (Securities Exchange Board of India) has announced a slew of measures to make our business and financial environment easy for our home-grown entrepreneurs to thrive. The finance ministry too announced an INR 10,000 crore (US$ 150.9 billion) fund for risk capital investment in startups last year. Another INR 100 crore (US$1.5 billion) has been allocated to fund the incubation infrastructure for startups.
With the spotlight trained on startups over the last couple of years, it is a natural outcome for them to have snagged a great deal of interest from various stakeholders. It’s not surprising then that it’s not just investors and various industry bodies such as Nasscom, who are doing their bit for the ecosystem. Leading corporate houses and high net-worth individuals (HNIs) like Ratan Tata, too, have stepped in to do their bit to boost the ecosystem.
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Corporates are looking out for themselves
First of all, while many corporates are undertaking measures to fuel the ecosystem purely as a means to ‘give back’ to the system, there are many that are also doing so to bolster their own long-term interests — given the fact that drawing synergies from startups can give them a big lead on the innovation front. And there is absolutely no harm in that since it benefits the entire industry.
In today’s dynamic market environment, innovation is a vital element for success or else your fate is doomed and they are trying to get that competitive advantage by partnering with startups in various ways.
It’s common to hear of large companies taking a stake in startups or acquiring them altogether in national dailies on a regular basis these days. This has been a major confidence booster for many small startups operating in a niche domain.
Hitching their wagon to startups
Reliance Industries Limited (RIL), the energy leader and a giant among Indian corporates, has gone a step ahead and recently signed a three-year pact with Microsoft Ventures in India to set up startup hubs that would give a platform to new companies in the fields of education, mobility, Big Data, healthcare and digital media.
The first hub has been set up in Navi Mumbai and has started operations this October. The idea is to help accelerate startups to scale swiftly with the aid of the latest technology, which in turn will generate more business for RIL and create many more jobs.
Hitching its future wagon to the booming startup scene is another electronics major, Korea’s Samsung Electronics, that began partnering with startups in 2013 to leverage their products. It built new consumer apps on its platform Tizen and invited a few selected companies to develop these apps for it.
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Rootworks, an Indian startup, was chosen to build two versions of Zitrr for Samsung and got US$65,000, plus a partnership for more projects down the line. This helped the young startup to open two offices — Bangalore and Baroda (west India). Such opportunities for startups to collaborate with larger and established corporates puts them on a much better footing, since it not only validates their product or idea but could translate into steady revenue streams for them to secure their future.
Even corporate giant Wipro has created a US$100 million fund to invest in tech startups, while Infosys announced a US$500 million fund for startups in the automation and Artificial Intelligence space as a part of its revival plan. Other corporates like TCS, too, have set aside sizeable funds to foster innovation and are encouraging entrepreneurship, not just outside but within the organisation as well.
What the future holds
Nasscom’s prestigious 10,000 Startups initiative that was launched to scale up the startup ecosystem in India with incubation and funding support for them, too, has received a tremendous response with the active involvement of companies like Microsoft, Google, Intel, Verisign, IBM and Kotak. It is also common to see startup events in the form of contests and more, wherein the best startups get recognition and many other attractive perks that can boost their prospects in the daunting new world.
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With such valuable and experienced support from the Indian corporate sector, the going has never been better for these startups. Whether it’s being able to get ready-access to these corporates as vendors/partners, get incubation support or access to physical and financial resources, help is flowing in from many quarters. With this, they can now focus on maximising their potential to transform India and the world.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at writers[at]e27[dot]co
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