Ever wondered how India’s startup journey began? Trace back to the liberalization of the Indian IT industry in 1984 and the consequent launch of the first ever commercial internet service by VSNL in 1995.
Since then, there has been no looking back! Once known to be the country of snake charmers and elephants, India now ranks third in the world for the most number of startups in technology. Indeed, we’ve come a long, long way with India becoming the hub of more than 56,000 startups today.
Accelerators and incubators are known to offer startups effective ways to grow their businesses. The key differentiation between the two being accelerators "accelerate" growth of an existing business, while incubators "incubate" ingenious ideas with the hope of building a sustainable business model. To explain simply, accelerators focus on scaling a business while incubators are often more focused on innovation.
While university backed incubators have been in existence since the pre-1990s, start-up incubators have picked up in the last four-five years. Thus, India is witness to more than 100 accelerators and incubators across the country, stepping in, to try and cherry-pick the most viable startups. With close to only 9% startups being funded, 1% acquired and almost 16% dead-pooled, there is opportunity galore for accelerators and incubators to mold and nurture startups on their journey to success. This has further led to a growing interest among foreign-based accelerators to not only accept cohorts but also run India-based accelerator programs.
So, what is it that accelerators and incubators have in store for startups? In the present scenario, a traditional accelerator offers a grant for a percentage of equity and provides the startup with mentoring, business training, strategy planning, funding, and so much more. However, what is really interesting is for the accelerator or incubator to be able to identify and pinpoint what the startup really needs to grow the business. Is it industry connections to run successful pilot projects with potential customers or a winning strategy to scale up the business model? Determining the challenge is half the battle won. Connect them to the right match – be it a corporate investor, client or mentor, and its game, set and match!
With $13.5 billion funding across 885 deals and almost thirty-four new funds launched in 2017, there is no dearth of funding opportunity. The Maharashtra government recently issued grants worth Rs. 1 crore to innovative startups disrupting the healthcare and rural sector in its very own version of Shark Tank at the Magnetic Maharashtra convention. Taking a cue from the Central government, the Karnataka government set up a Fund of Funds with a corpus of USD 31 million and gave grants to almost 44 startups ranging from USD 80k to USD 310k.
The success of start-up incubators and accelerators over the last couple of years have been key in shaping India’s robust start-up ecosystem. Today, the co-working space revolution goes beyond the four walls of the corporate office to reach out and add value to the startup and eventually contribute to the wider business ecosystem. While co-working spaces are extremely underrated in India, their demand is steadily rising with increasing popularity among entrepreneurs today looking up to build up business network amongst other benefits like Wi-Fi, décor and funding.
The author is the Managing Director and CEO of JetSynthesys. Jet Labs, a division of JetSynthesys runs Garage, a San Francisco style co-working space in Parel, Mumbai.