Speak to a CEO of any consequence and the conversation is woven around innovation.They are sitting up and taking note of ideas emerging from startups while they drive their corporate agenda around innovation.
As traditional business houses discover that risky bets accelerate their competitive edge, conglomerates including the Tatas, Reliance, Mahindra, Bharti Airtel and IT biggies such as Infosys and Wipro are increasingly collaborating with the startup ecosystem in their quest to find the next new thing. find the next new thing.
GenNext Ventures, the venture capital arm of Reliance Industries has partnered with Microsoft Ventures to launch the GenNext Innovation Hub, an accelerator to support entrepreneurs in areas like technology , user experience, design and go-to-market strategy . GenNext will incubate startups through a four-month programme and will fund select ventures graduating from the hub.
Similarly, the Mahindra Group, earlier this year, launched the $1-million Rise prize that has two challenges -the mobility challenge that seeks solutions for driverless cars in India and the solar challenge that aims to make solar energy products more accessible to people.
A few years ago, the Tata Group launched the Tata First Dot initiative to foster student entrepreneurship in the country providing them access to resources and networks to refine their business models and access mentors.More recently , chairman emeritus of Tata Sons, Ratan Tata, has been among those backing MIT ( Massachusetts Institute of Technology) Media Lab’s initiative called Kumbhathon that is seeking to develop technologies through startups to tackle the many problems that will emerge ..
He even made personal investments into three start ups this year -e-ccommerce major Snapdeal, furniture e-tailer Urban Ladder and jewellery e-tailer Bluestone. Several other prominent CEOs are also making such personal investments while more are doing it through their family offices.
Sanat Rao, partner M&A, at software products think tank, The Indian Software Products Industry Roundtable (iSPIRT), feels that large corporates invest in or incubate early-stage startups to potentially fill a key technology gap or enable a new market segment for the larger corporate parent. “They identify startups with potentially game-changing ideas which may eventually disrupt or change the corporate’s current business model, “he said.
It’s just not Indian IT firms like Infosys and Wipro betting big on startups, MNCs in India are also eyeing partnerships with Indian startups. Cisco Investments, the venture capital arm of Cisco, has earmarked $40 million to fund early-stage firms in India under the `India Innovation theme’. Cisco’s $ 40 million fund is part of the $250 million investments that was announced earlier in the year focused on next generation technologies.