In the past few years, the Indian start-up ecosystem has witnessed an unprecedented rise in tech-focused start-ups. The greater appetite for technology, data, and deeper internet penetration has birthed thousands of start-ups to address unique problems and has challenged the conventional way of doing business, and has created new segments. According to NASSCOM, the year 2019 has added 1300 new tech start-ups to the existing count of 8900-9300 tech start-ups, making India the third-largest start-up ecosystem in the world. The pandemic crisis has created a bleak future for the budding Indian tech start-ups as they are currently staring at financial losses due to the non-availability of funds.
As per a survey by a social media and community platform LocalCircles, only 16 percent of start-ups and SMEs have cash to sustain for more than three months. To help start-ups stay afloat in the pandemic the STPIs will float a venture capital fund to support start-ups & entrepreneurs from the tier II and III cities to launch new technology products. This scheme will support around 300 start-ups for the next three years by offering Rs 25 lakh risk capital and Rs 10,000 internship per start-up.
The aspiring entrepreneurs who are about to set their foot in the start-up ecosystem are in despair as the willingness of the investors would be more to conserve cash and not invest in new ones. But for a start-up to thrive, there is more to it than just receiving funds. Proper guidance, mentorship, and infrastructure facilities are required for the new-born start-up or idea to survive.
Here, incubation for the tech start-ups comes to the rescue.
How STPI helps the tech start-ups for incubation?
Software Technology Parks of India (STPI) is an autonomous society set up by the Ministry of Electronics and Information Technology. STPIs in association with industries and premier institutions has established CoE (Centres of Excellence) to create the next generation of entrepreneurs in the emerging sectors of technology like the Internet of things (IoT), Blockchain, FinTech, Artificial Intelligence (AI), Augmented & Virtual Reality (AR/VR), Electronic System Design and Manufacturing, Medical Electronics and Healthcare, Gaming and Animation, and Machine Learning, etc. These CoEs act as incubators for the tech start-ups by providing them the platform to do research, technology development, product development, technology incubation, and entrepreneurship by offering them the required resources and assistance.
What STPI has in store for tech start-ups?
Marketing and networking
The entrepreneurs are nobody when they begin. Apart from building an innovative product, the entrepreneur should also know to maximize reach and awareness about their brand and the product. CoE conducts sessions of general marketing and social media marketing, organizes roadshows, and international events to increase global visibility, the visibility created in the events helps to connect with future investors. Its partnership with key international promotional agencies will aid in cross border collaboration.
Technology and business mentoring
The CoEs provide education and training to the start-ups in the field of research, user experience, and business technology courses through cutting edge programming and deep tech applications. For conversion of a start-up idea to reality, they assist in the development, enhancement, and designing of the pilot project. They help to transform a start-up from idea level to Prototype level, Prototype level to MVP (Minimum Viable Product) level, MVP level to GTM (GoTo Market) level and help graduate the start-ups to full-fledged company status. They also conduct need-based mentoring sessions on legal, compliance, branding, cybersecurity, domain technologies, etc.
It reviews and monitors the progress or performance of start-ups periodically and takes necessary action as and when required with the project management group.
Funding and capital
The CoEs shall support and guide start-ups for raising funds by leveraging networking with angel investors, venture capitalists, and high net worth individuals as per the appropriate size of start-ups.
Intellectual property rights
STPI has signed a memorandum of understanding with NRDC (National Research and Development Corporation) that will help start-ups to file Intellectual Property Rights such as Patenting (Drafting & Filing), Trademark, Copyright, and any other IPR related legal or statutory support.
According to NASSCOM, the year 2019 has added 1300 new tech start-ups to the existing count of 8900-9300 tech start-ups, making India the third-largest start-up ecosystem in the world.
Which start-ups can apply?
The start-ups who want to apply for incubation in CoE should be a
- Private Limited Company or
- Registered Partnership Firm or
Limited Liability Partnership
Date of registration
The date of registration should not be beyond 10 years. If a company is not registered, an application may be made in the names of the founders. However, they should ensure that the company is registered within three months from the date of selection for CoE.
The start-up should not have an annual turnover of more than Rs. 100 crores for any of the financial years since its incorporation. The start-up should be an original entity and should not have formed by splitting up or reconstructing an already existing business.
Don't be a lone wolf. Lean on the experience and smarts of your teammates, investors, and mentors to help solve the tough problems and take advantage of the opportunities.
- Seth Bannon, founder and CEO of Amicus
Centre of Excellence
STPI has set various Centre of Excellence ( CoEs) for nurturing the tech start-ups:
The STPI IoT OpenLab is a centre of excellence in partnership with Arrow Electronics with STPI that aims to support & nurture around 500 start-ups for five years. This IoT incubator is focussed to identify and support promising start-ups in the field of IoT. It supports the start-ups right from its idea stage to Go-to-Market.
Start-ups are selected through Hackathons and Business/Idea Challenge etc.
The selected start-up in the Complete Package model should pay a one- time registration charge of Rs 10,000. They will also share 3 per cent equity with STPI.
In line with minimizing physical contact, the fintech sector is expected to grow in the post COVID-19 world. Many financial institutions will transform their payment services to contactless, less paperwork, and accessible. The conventional way of applying for loans will be instant and digital lending for MSMEs will see a spike in the future. Finblue’s incubation facility will nurture a total of 58 fintech start-ups for five years. It gives the budding fintech start-ups access to SandBox which provides a safe operating environment where they can run codes and create simulated responses from all APIs. The Sandbox consists of API of various banks such as Yes Bank, PayPal, and NPCI, etc, core banking software. The incubation program is a premium plug and play co-working space for fintech start-ups.
Start-ups are selected through the Hackathon challenge.
The start-ups selected for the incubation programme will have to offer an equity up to 5 per cent to STPI. The start-ups need to pay Rs. 10,000 and taxes for availing the services.
Neuron in collaboration with ISB Mohali and the Government of Punjab is an incubator that identifies and nurtures start-ups in the field of AI and Data Analytics and Audio-Visual Gaming (AVG). It is targeting to support 50 start-ups a year.
Start-ups are chosen based on an Open Challenge Programme where they get an opportunity to give innovative solutions to the problem statements identified by Government and Industry.
The selected start-up has to offer equity of up to 5 per cent to STPI as per the present valuation. The start-up has to pay Rs. 6,000 per seat per month for availing the services of Neuron.
To reduce dependence on electronic imports, Electropreneur is a start-up incubator that identifies and nurtures start-ups in electronics system design and manufacturing by giving them a platform for research and development to bring product innovations. It helps the start-ups in prototyping, developing, and commercialization of ESDM (Electronic System Design and manufacturing) products. The ESDM lab provides equipment and prototyping in the areas such as Power Electronics, LED, Embedded hardware and software, and Testing. It targets to incubate 35-40 start-ups in five years with an average of eight start-ups per year.
In the post COVID-19 world, the use of AR and VR technology will see a spike. As people will be apprehensive visiting malls and showrooms, many retail outlets and automobile companies will be embracing this technology to give people a virtual experience of the store or the car through computer-generated imagery. According to a report published by Allied Market Research, the global AR & VR Market will touch $571.42 billion by 2025, with a CAGR of 63.3 per cent from 2018 to 2025. VARCoE is an initiative by STPI in collaboration with IIT Bhubaneshwar to identify and evaluate promising start-ups in the field of AR and VR. It will also create an ecosystem to boost research and development, immersive visualization, skill development, and entrepreneurship in virtual and augmented reality. It plans to nurture 300 start-ups over five years.
The start-ups are screened based on solutions presented for VARCoE Hackathon using AR&VR that allows the budding start-ups to work on any problem statement relevant to the Government, Industry, Mining, Energy, Process Control and Industrial Automation, Academia, Healthcare, Tourism & Hospitality, Art & Architecture, Transport, etc.
With air quality deteriorating day by day, there will be an emergence of automatic and electric vehicles. Hinged on the principles of sustainability, the Autonomous, Connected, Electric & Shared (ACES) concept will be shaping the future of the mobility sector. Motion is an initiative by STPI in collaboration with Govt. of Maharashtra, Tata Motors, Kinetic Group, Intel, and MathWorks, that provides specialized state-of-the-art incubation facility and physical laboratories for start-ups in the area of Automatic and electric vehicles. It is planning to incubate 51 start-ups for five years.
The start-ups are selected based on the innovative solution to the problem statement mentioned in the Open Challenge Programme. The Open challenge programme for Motion consists of problem statements based on creating innovative solutions for better accident warning, sensor technologies etc.
There will rarely be any Indian who has not downloaded ‘Ludo King’ in the first 21 days of lockdown. With restrictions in amusement parks and other recreation venues, the online gaming world is expected to fill in the gaps for entertainment. STPI has opened India’s first Centre of Excellence IMAGE intending to support innovation and promotion of gaming, VFX, Computer Vision, and AI start-ups. IMAGE is backed by the Ministry of Electronics and Information Technology (Meity) and the Telangana government. It offers integrated programs, Computer Vision LAB and GameLab, for start-ups to scale up through its incubation facility. It plans to incubate 25-30 start-ups each year and a total of 140 start-ups for five years.
Participants are needed to fill an application form. If shortlisted they are invited for a pitching session at IMAGE CoE Hyderabad. The incubated start-ups will receive a seed fund of Rs 5 Lakhs and access to angel investors and venture capitalists.
After successful pitching, the start-up gets selected for the accelerator program where they need to pay a one-time registration fee of INR 20,000.
It is an incubation centre for start-ups focussed on blockchain technology. India is progressing towards digital payments because of its efficiency, simplicity, and swift functionality. But apart from the benefits, there is a hidden risk of data breaches that can hack the digital payment systems. Blockchain technology will resolve these attacks to a greater extent with better levels of privacy and security. As we digitize our processes more, the concern of safeguarding our data from breaches becomes inseparable. In the future, blockchain technology will find a purpose in sectors like healthcare and finance. Apiary will be incubating 100 start-ups in five years.
The start-ups are screened through an Idea Challenge Programme in Blockchain Technology in domains like Supply Chain, Agriculture, Finance, and e-governance use cases about Land Records, Public Health, Labour, Service Record, Pension Delivery and Law Enforcement and Evidence Management.
Health is wealth. The pandemic attack of 2020 has catalysed the need for an excellent medical infrastructure. Infusing the medical and health sector technology will help doctors in better clinical decision making. According to a report by the World Health Organisation (WHO), the Indian medical devices market will grow to $8.16 billion in 2020 at a CAGR of 16 per cent. To reduce the dependence on imports of electronic medical devices and in the wake of the pandemic, the STPI has newly launched an incubator, MedTech, in Lucknow to promote research and development of start-ups in the fields of medical electronics and health informatics. The start-up benefits in getting complete access to IoT and Medi Electronics and health informatics Lab equipped with test equipment and tech support to bring innovation in products. Medtech intends to support and nurture 50 start-ups for five years.
The start-ups are chosen based on an Open Challenge Program (OCP) where budding start-ups get to work on the problem statements identified by Government, Industry, Academia & Start-up in the focused domains of MedTech.