How is the startup scene in India – Is it thriving? What kind of companies are making it big? Where are the investments coming from? What is the support structure like? The questions are never-ending, the answers though, are a few and far in-between. India is a contrast to most other global startup ecosystems, where information on startup enterprises seem to be more organized and ubiquitous online. In India’s defense though, the country is a potpourri of a multitude of cultures and languages, and with 10% internet penetration (120+ million), it has its task cut out. All the more reason why efforts by Bowei Gai and Benjamin Joffe, working on India’s World Startup Report is a remarkable feat – be it comparisons with global powerhouses or the trendspotting and future forecasting efforts on the Indian technology startup scene.
An aspect in the report, which a couple of entrepreneurs pointed out as well, is they have missed out on the time-keeping trend. On ‘India time’ the report states ‘Due to culture & poor traffic, it’s expected that people will be late to meetings/events. 15min-1hr delay is common, but sometimes it can be as long as 2 hrs.’ Speaks volumes of the patience of the other party for waiting for 2 hours, or were they locked in?
Jokes apart, from recent meetings and events experience in India – be it at founders get-togethers, angels and startups meets or events organized by government industry bodies, they have all begun on time. While these may well be exceptions, there is a growing time-keeping trend among the business community. However just like the snake-charmer stereotype this too will take some exceptional work, until then Indian entrepreneurs will have the benefit of low time expectations.
Another perception mentioned in the report and one that might need a re-look is ‘In China, things happen because of the government. In India, things happen in spite of it’. While one cannot dispute the support Chinese authorities offer to businesses and the relative ease of paperwork there, it needs to be asked which of the central and 28 state governments in India are being indifferent to the promotion of enterprise and innovation. While much more can be done by the authorities in India, there are some initiatives by the government and related institutions that have a positive impact on startups development:
Public-Private Partnership for a ‘Silicon Coast’
A year ago India’s first Public-Private Partnership Startup Village was opened in the state of Kerala, a traditional non-IT centre. Set up in the suburbs of Kochi jointly under the country’s Department of Science and Technology and the state-run Technopark, and in collaboration with MobME Wireless, it aims to host 1000 ventures from campuses across the state to create, well, a ‘Silicon Coast’. Not a mean target, considering the inspiration they have from the award-winning mobile startup MobME Wireless, started by fellow college students in 2006 and one that is worth over INR 100 crores (US$ 18.5 million). The company which was on the verge of scripting a college campus to IPO (Initial Public Offering) success story, has now fine-tuned its strategy to raise funds via the new NSE (National Stock Exchange) SME Exchange platform.
Special SME Exchanges ‘Emerge’ to raise Capital
In a recently held Financial Excellence event by the Confederation of Indian Industry (CII), delegates felt the government with its recent initiatives wanted SMEs to think much bigger. This year’s budget proposals have paid more attention to startups, who along with SMEs, can now be listed at the two SME exchanges in the country, without having to go through an IPO (Initial Public Offering) and with a select investor base. NSE’s SME Exchange ‘Emerge’ was one of two SME Exchanges that was launched in India late 2012. The other being from the BSE (Bombay Stock Exchange). The platform, along with handholding and due diligence of startups keen to enter the fray, will share competent reports and maintain certain regulations to protect investor money. Initially with a select group of investors, the platform will steadily increase the investor base to benefit startups raising equity capital. Stay tuned for more updates.
Indian Public Banks for Innovative Venture Finance
At the same CII event, it was a welcome change to see Public Banks step up the ante in helping startups raise capital, witnessed from an informative presentation by an Indian Bank delegate. Supported by the Finance Ministry, 10 Public Sector Banks have been reaching out to new entrepreneurs setting up innovative projects. Some aspects of the evaluation model would include, the startup needs to have angel backing, and funding will be given upto a credit limit of INR 10 million. The select banks have also set up specialized cells and branches to market their venture debt scheme to innovative startups. Feel free to reach out for more details.
At the end of the day, while the governments and public funds are always there, it is for more private players and active startup supporters to help realize the success of innovative products and entrepreneurs.
Also, while ‘Information is Wealth’, its access is not the easiest in a large country like India, unless you have the right knowledge-partners, and those of us keen to develop the innovation space further.
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This entry was posted on Monday, March 25th, 2013 at 6:58 am and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.