“Never dream of becoming something, if you dream, dream of doing something.”

These words from Prime Minister Narendra Modi have been the foundation for India’s ambitious startup campaign — Startup India, Standup India.

Aimed to make India, one of the largest and vigorous startup ecosystems in the world, PM Modi’s flagship initiative Startup India programme took a slew of policy initiatives to build a strong, conducive, growth-oriented environment for Indian startups and thereby help generate lakhs of job opportunities in the country.

Launched on January 16, 2016, the initiative marked its three-year anniversary last week.

The 19-point Startup India Action Plan envisaged several incubation centres, easier patent filing, tax exemptions, ease of setting-up of business, an INR 10,000 Cr ($1.45 Bn) corpus fund, and a faster exit mechanism, among other things.

And if we look back, it has been a phenomenal growth story so far, especially for a country that was ranked below 100 by the UN Ease of Doing Business Index and had only four states with definitive startup policies three years ago.

Despite all the existing gaps and ongoing challenges such as data protection, angel tax, pending policy approvals and more, today, India has climbed up to the 77th position in UN’s Ease of Doing Business Ranking. It has also been attracting globally-acclaimed investors, multinationals leveraging Indian tech startups to supplement their technology, and is home to more than 39K startups, according to Inc42’s The State of Indian Startup Ecosystem 2018 Report.

Not convinced! Let’s have a look at a few numbers!

• Between 2016-2019, 15,113 startups were recognised under the Startup India programme across 492 districts in 29 states and six Union territories
• 55% of the recognised startups are from Tier 1 cities, 27% from Tier 2 cities, and 18% are from Tier 3 cities
• 13,176 recognised startups have reportedly created 1,48,897 jobs with an average of 11 employees per startup
• 45% recognised startups have at least one or more women directors
• 24 Indian states have introduced a startup policy
• The government made 22 regulatory amendments and approved 1,275 patent rebates in the last three years
• More than 288.16K registered users are there on the Startup India hub
• Startup India Hub has addressed 121.83K queries and facilitated 673 startups
• More than 233.27K have registered under the Startup India learning programme

(Source: Startup India)

Here’s a glimpse of Startup India’s journey so far:

Startup India: Enabling A Conducive Ecosystem Beyond ‘Jugaad’

The Startup India Action Plan intended to build a strong support ecosystem that is conducive for the growth of startups and supports the spirit of entrepreneurship in the country. It emphasised on self-compliance, which made the team working at the Startup India Hub a key stakeholder in the ecosystem to work in a hub-and-spoke model and collaborate with various enablers.

With the introduction of the Fund of Funds worth INR 10,000 Cr, the Indian government took the first step in making startups a viable means of livelihood and not just ‘jugaad’ (a Hindi word meaning an improvised or impromptu solution to something). Also, it made the youth of the country look at entrepreneurship as a viable career option.

At the same time, government think tank NITI Aayog launched the Atal Innovation Mission to foster innovation among budding entrepreneurs at the grassroots level. As part of this, 5,441 Atal Tinkering Labs have been set up across the country. In the Union Budget for 2018, the government also allocated $480 Mn (INR 3414.19 Cr) for new-age technologies to further support innovation in the Indian startup ecosystem.

Under the Startup India programmed, startups were defined and redefined. For instance, the startups’ age was also increased from 5 to 7 years (10 in the case of biotech). The government has taken various initiatives to boost the growing startup culture in the country such as fast-tracking of startup patent applications, income tax exemption, and self-certification. It also launched the Startup India Hub to bridge the gap between various stakeholders of the startup ecosystem.

And if that’s not enough, the buzz generated by the programme helped open up a lot of opportunities for startups. Take funding, for instance — according to Inc42 DataLabs, between 2016 and 2018, over $30.3 Bn was invested in Indian startups across 2,550 deals. Also, VC investments saw a moderate rise despite an overall fall in funding in 2018, which indicates a positive sentiment among the investors in the near term.

Startup India: Impact On Individual States

In the past few years, several states have taken the onus to build their own incubators, coworking hubs, etc, to boost the innovation in the state. Earlier, defence minister Nirmala Sitharaman had asked local MPs to set up coworking spaces in their constituencies.

Recently, Rajasthan launched Bhamashah Techno Hub, one of the largest incubators in the country, and Kerala launched one of the biggest coworking spaces in India. Karnataka announced a credit line of INR 2,000 Cr ($281 Mn) for the startup ecosystem in the state, with an aim to have at least 20,000 startups by 2020.

Telangana, Andhra Pradesh, Odisha, Madhya Pradesh, and Gujarat are some other states that offer end-to-end support to startups and have come up great initiatives to boost their respective ecosystems.

DIPP’s State Startup Ranking Framework: The Game Changer

At the core of the Startup India programme are the state startup policies, which the states have started to take seriously under the overview and guidance of Department of Industrial Policy and Promotion (DIPP) and the Centre.

Before Startup India was launched, just four states had their startup policies in place and today, 24 Indian states have introduced their own policies.

The DIPP recently released the State Startup Rankings on the basis of the Startup Policy Framework for 2018 under which Gujarat was rated the ‘Best-performing state’, while Karnataka, Rajasthan, Odisha, and Kerala took the title of the ‘Top-performing states.’

One of the interesting aspects of these rankings was the DIPP’s effort to highlight the strength and weaknesses of each state in a separate state report, in which they highlighted the steps forward for the state to perform better.

Policy Changes Making Slow Progress

Inc42 in its annual year-end series ‘2018 in Review’, noted that the pace of policy formulation has been slow in the country. While some of these policies, like Drone Regulations 1.0, are already in effect, others have been drafted, are being redrafted, or are pending approval. The list includes:

• Personal Data Protection Bill
• Ecommerce Policy
• Epharma policy
• Electric Vehicles Policy, FAME II Extension
• National Electronics Policy
• Draft PSS Amendment Bill and more

On one hand, the lack of policies in these sectors such as epharma and electric vehicles (infrastructural) has been keeping many investors away and on the other, angel tax is a big issue for the startup ecosystem.

The Startup India programme has, in fact, been facing a serious threat because of the angel tax issue and angel investments have been declining in the last two years. Recently, the DIPP issued a notification easing the angel tax exemption process. However, the notification has limited appeal. It neither caters to the concerns of all the startups facing angel tax issues nor addresses the core concern — the DCF (discounted cash flow) valuation method.

Further, this existing angel tax exemption mechanism is applicable only to those DIPP-recognised startups whose aggregate amount of paid-up share capital and share premium after the proposed issue of share does not exceed INR 10 Cr ($1.4 Mn).

Additionally, the approval mechanism will also be applicable to startups incorporated before April 2016. Initially, the exemption was restricted to a maximum 3-years for startups.

Startups that were born before 2012 and those that have received assessment orders have already been excluded from the exemption mechanism.

Is Indian Startup Ecosystem Gunning For The Number 1 Slot?

Overall, Startup India has provided a major push to the country’s entrepreneurial and innovative spirit. According to Inc42’s State Of The Tech Startup Ecosystem Report 2018, India now has 26 unicorns and more than 31 soonicorns. Overall, startups have created a value of $130 Bn.

With global investors such as Sequoia Capital, SoftBank, Tencent, and Alibaba bullish on the Indian tech and consumer internet segment, we are also seeing startups come up in core manufacturing to leverage the Make In India campaign. Just last year, India surpassed Vietnam and gained the second position in the mobile manufacturing segment.

Also, the Indian government’s attempts to build exchange programmes with foreign startups in countries like Germany and SAARC nations has opened new doors of opportunities for the stakeholders in the startup ecosystem.

The formation of international startup corridors with countries like Japan, the US, the UK, Israel, and Portugal, among others, will certainly boost the startup and cross-border investor sentiment as well.

Even as the Modi government enters the last phase of its current term, there are a plethora of issues such as pending policies, angel taxation, infrastructural and bureaucratic hurdles that startups still have to face and need to be resolved at the earliest.

According to a survey of 15K startups, only 18% of the respondents said they actually benefited from the Startup India scheme. Only 163 startups had benefited from the Fund of Funds in the last three years till December 31, 2018, and the fund allocation and distribution is coming down further. This poses a question over the efficacy and cost-effectiveness of the scheme.

The government needs to address each of these concerns before we can even think of an ecosystem like that of Israel or Silicon Valley.

Gender parity is still an issue in the startup ecosystem and the revelations of #MeToo left the Indian startup ecosystem disturbed.

But amid the good and the bad, the Indian startup ecosystem continues to grow manifold and carve out an ever-expanding niche for itself in the global ecosystem.

The article has been co-written by Bhumika Khatri and Suprita Anupam.

The post How Successful Is PM Modi’s Startup India Programme? Here’s The Numberspeak appeared first on Inc42 Media.

India today is home to more than 39K startups. The Indian startup ecosystem is producing unicorns at double the speed than before, with multi-billion dollar fundings from global investors, and celebrating high-profile exits such as the $16 Bn Walmart-Flipkart acquisition last year. At the same time, the country’s micro, small, and medium enterprises (MSME) sector comprising 577 Cr companies is beating challenges of setting up and building the consumer base, among others.

But an idea remains an idea if it does not get the requisite working capital on time. According to reports, less than 5% of MSMEs have access to formal credit, while others rely on informal sources to fund their businesses. For Indian startups, while there are a number of private equity and debt funding options available, to get funding at the idea or early stage is a challenge.

In a much-needed move to address this gap, the Indian government has rolled out initiatives to offer business loans for startups and MSMEs through authorised channels. Among the several MSME schemes for entrepreneurs, one of the most important ones was the recently-launched 59-minute loan platform that enables easy access to credit for MSMEs.

Also, the Small Industries Development Bank of India (SIDBI) has started lending to companies directly instead of through banks. These government loans for startups are at least 300 basis points lower than the ones that are offered by banks. SIDBI offers long-term loans of up to five years online.

A number of other government startup loans and schemes for entrepreneurs in India have been introduced in the past few years. Here is a list of some of the most popular and notable government schemes that offer business loans for startups And MSMEs in India.

1. 42 (End to End Energy Efficiency) – Click to read more ➤
2. Bank Credit Facilitation Scheme – Click to read more ➤
3. Credit Guarantee Scheme (CGS) – Click to read more ➤
4. Credit Linked Capital Subsidy for Technology Upgrades – Click to read more ➤
5. Coir Udyami Yojana – Click to read more ➤
6. MSME Business Loans For Startups In 59 Minutes – Click to read more ➤
7. Pradhan Mantri Mudra Yojana (PMMY) – Click to read more ➤
8. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE) – Click to read more ➤
9. Standup India – Click to read more ➤
10. Sustainable Finance Scheme – Click to read more ➤

4E (End to End Energy Efficiency)

Launched in: September 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: MSME startups in the manufacturing or services sector that have been operating for at least three years and have earned cash profits in the last two years are eligible for the loan. Here are the specific eligibility criteria.

• The startup should not be in default with any bank/financial institutions
• It should have undergone a process of detailed energy audit (DEA) through a technical agency/consultant that is a Bureau of Energy Efficiency (BEE)-certified energy auditor
• The detailed project report (DPR) prepared by the technical agency/consultant should have been vetted by the Energy Efficiency Cell (EEC), SIDBI
• The unit should not have availed a performance linked grant under the World Bank-Global Environment Facility (WB-GEF) Project for the proposed energy efficiency (EE) Project and should be in compliance with the Environment and Social Management Framework

Overview: This MSME scheme for entrepreneurs has been launched jointly by India SME Technology Services Ltd (ISTSL) in association with World Bank. The main objective is to implement energy efficiency measures across Indian industries on an end-to-end basis. Also, it aims to help startups finance purchases of second-hand machinery/equipment.

The business loans for startups under this scheme meet part costs of:

• capital expenditure, including for the purchase of equipment/machinery, installation, civil works, commissioning, etc.
• any other related expenditure required by the unit provided it is not more than 50% of capital expenditure.

Fiscal incentives under the 4E scheme:

• The MSME startup has to pay only INR 30,000 and applicable taxes and the balance fee will be paid by SIDBI to auditors
• Up to 90% of the project cost with a minimum loan amount of INR 10 Lakh and a maximum loan amount not exceeding INR 150 Lakh per eligible borrower can be granted under this scheme.
• Eligible loan amount should not exceed one-fifth of the total turnover of the applicant unit.

Time period: The repayment period, including the initial moratorium period of up to six months, shall not be more than 36 months for loans up to INR 100 Lakh and 60 months for loans beyond INR 100 Lakh.

To know more about this startup scheme by the Indian government, click here.

Bank Credit Facilitation Scheme

Launched in: NA

Headed by: National Small Industries Corporation (NSIC)

Industry: Sector-agnostic

Eligibility: MSMEs registered in India

Overview: The scheme aims to meet the credit requirements of MSME units. The NSIC has entered into a MoU with various nationalised and private sector banks for the purpose. Through syndication with these banks, the NSIC arranges for credit support (fund- or non-fund-based limits) from banks without any cost to MSMEs.

Fiscal incentives: NA

Time period: The repayment period varies depending on the income generated from the startup and generally extends from five to seven years. However, in exceptional cases, it can go up to to 11 years.

To know more about this startup scheme by the Indian government, click here.

Credit Guarantee Scheme (CGS)

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector-agnostic

Eligibility: The scheme is applicable to new and existing MSMEs engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, self-help groups (SHGs), training institutions, etc.

Overview: The Credit Guarantee Scheme was launched by the government to strengthen the credit delivery system and to facilitate the flow of credit to the MSME sector. The lending institutions under this scheme mainly include public, private, and foreign banks, along with regional rural banks and the SBI and its associate banks.

Fiscal incentives: This MSME scheme for entrepreneurs comes with a number of benefits, including term loans and/or working capital loan facility up to INR 200 Lakh per borrowing unit. Here are some more details of the scheme:

• The guarantee cover provided is up to 75% of the credit facility up to INR 150 Lakh
• 85% of credit facility for loans up to INR 5 Lakh is provided to micro-enterprises
• 80% of credit facility for MSMEs owned/operated by women and all loans to NER including Sikkim
• For MSME Retail trade, the guarantee cover is 50% of the amount in default subject to a maximum of INR 50 Lakh.

Time period: The credit guarantee will commence from the date of payment of guarantee fee and will run through the agreed tenure of the term credit in case of term loans/composite loans and for a period of five years where working capital facilities alone are extended to borrowers, or for such period as may be specified by the guarantee trust.

To know more about this startup scheme by the Indian government, click here.

Credit Linked Capital Subsidy for Technology Upgrades

Headed by: Office of the Development Commissioner, Ministry of MSMEs

Industry: Sector-agnostic

Eligibility: Existing small-scale industry (SSI) startups registered with the State Directorate of Industries that have upgraded their existing plant and machinery with state-of-the-art technology, with or without expansion, are eligible for this scheme. Also, new SSI units registered with the State Directorate of Industries that use the appropriate, eligible, and proven technology, duly approved by the Governing and Technology Approval Board (GTAB)/Technical Sub­Committee (TSC), will be eligible.

Overview: This business loan for startups aims to facilitate technology upgrades by providing upfront capital subsidies to SSI units, including khadi, village, and coir industrial units, on institutional finance (credit) availed by them for modernisation of their production equipment (plant and machinery) and techniques.

Fiscal incentives: The ceiling on business loans for startups under the scheme has been raised from INR 40 Lakh to INR 1 Cr while the rate of subsidy has been enhanced from 12% to 15%. Here, the admissible capital subsidy is calculated with reference to the purchase price of plant and machinery, instead of the term loan disbursed to the beneficiary unit.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Coir Udyami Yojana

Headed by: Coir Board

Industry: Agriculture

Eligibility: All coir processing MSME startups registered with the Coir Board under the Coir Industry (Registration) Rules, 2008, are eligible for this scheme. Here is the criteria:

• Assistance under the scheme will be made available to individuals, companies, self-help groups, NGOs, institutions registered under the Societies Registration Act 1860, production co-operative societies, joint liability groups, and charitable trusts
• Startups that have already availed of a government subsidy under any other scheme of the Indian government or any state government for the same purpose are not eligible to claim a subsidy.

Overview: The scheme is aimed at supporting the establishment of coir units. Banks will finance capital expenditure in the form of a term loan to meet the working capital requirements in the form of cash credit. Projects can also be financed by the bank in the form of composite loans consisting of capex and working capital.

Fiscal incentives: Banks will support project cost of up to INR 10 Lakh plus one cycle of working capital, which shall not exceed 25% of the project cost. In addition:

• This should be exclusive of the INR 10 Lakh limit proposed.

• The amount of credit will be 55% of the total project cost after deducting 40% margin money (subsidy) and the owner’s contribution of 5% from beneficiaries.
• The subsidy will be computed excluding working capital component.

Time period: Rate of interest chargeable for the business loans for startups shall be at par with the base rate. Repayment schedule may not exceed seven years after an initial moratorium, as may be prescribed by the concerned bank/financial institution.

To know more about this startup scheme by the Indian Government, click here.

MSME Business Loans For Startups In 59 Minutes

Launched in: September 2018

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector Agnostic

Eligibility: For existing businesses: Borrower should be GST, IT compliant and must have six months bank statement facility. The business loan eligibility is determined by a company’s:

a. Income/ Revenue
b. Repayment capacity
c. Existing credit facilities
d. Any other factors as set by lenders (banks)

Overview: Prime Minister Narendra Modi described this initiative last year while unveiling the 12-point action plan for the MSME sector. The initiative aims at automation of various processes to loan appraisal in such a way that one gets an eligibility letter, in-principle approval in less than 60 minutes and chooses the bank that one may prefer to ease access to credit to smaller and micro enterprises.

Post the in-principle approval, the time taken for business loan disbursement depends on the information and documentation provided on the platform and to the banks. Generally, post the in-principle approval, the loan is expected to be sanction/disbursed in 7-8 working days.

Fiscal Incentives: The contactless business loans for startups are currently provided for value from INR 1 Lakhs Upto INR 1 Cr. The rate of interest starts from 8% onwards.

Time Period: NA

To know more about this startup scheme by the Indian government, click here.

Pradhan Mantri Mudra Yojana (PMMY)

Launched in: 2015

Headed by: Micro Units Development and Refinance Agency Ltd (MUDRA)

Industry: Sector-agnostic

Eligibility: Non–corporate small business segment (NCSB) comprising proprietorship/partnership firms in rural and urban areas can apply for the loan. Here are some examples of NCSBs:

• small manufacturing units
• service sector units
• shopkeepers
• fruits / vegetable vendors
• truck operators
• food-service units
• repair shops
• machine operators
• small industries
• artisans
• food processors and others

All kinds of manufacturing, trading and service sector activities can get a MUDRA loan.

Overview: MUDRA provides refinance support to banks/Micro Finance Institutions (MFIs) for lending to micro units that have loan requirements of up to INR 10 Lakh. According to recent media reports, in the financial year 2017-18, overall business loans worth INR 2.54 Lakh Cr were classified as Mudra loans, an increase of 41% from INR 1.80 Lakh Cr loans sanctioned in this category in the last financial year.

For 2018-19, a target of INR 3 Lakh Cr has been set. Interestingly, the non-performing assets (NPA) level under the PMMY was only 5.38% as on March 31, 2018 — almost half of the gross NPAs across all sectors in the country, which crossed 10% in fiscal 2017-18.

Fiscal incentives: MUDRA offers incentives through these interventions:

> Shishu: Loans upto INR 50,000

> Kishor: Loans above INR 50,000 and up to INR 5 Lakh

> Tarun: Loans above INR 5 Lakh and upto INR 10 Lakh

Generally, loans upto INR 10 Lakh issued by banks to MSMEs are given without collateral. Also, within these interventions, MUDRA ensures to meet the requirements of different sectors/business activities as well as business/entrepreneur segments.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)

Launched in: August 2015

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: New enterprises in manufacturing as well as the services sector can apply for this scheme. Existing enterprises undertaking expansion, modernisation, technology upgrades, or other projects for growing their business will also be covered.

Overview: The aim of this scheme is to provide soft loans, in the nature of quasi-equity, and term loans on relatively soft terms to MSMEs to meet the required debt-equity ratio for the establishment of new MSMEs and also to enable the growth for existing ones.

Fiscal incentives:

• For the general category, 10% of the project cost, subject to a maximum of INR 20 Lakh is provided as the loan amount
• 15% for the enterprises promoted by Scheduled Caste (SC) /Scheduled Tribe (ST) / Persons with Disabilities (PwD), and women, subject to a maximum of INR 30 Lakh
• Persons belonging to these categories must own a controlling stake (ie 51% or higher)

Time period: On expiry of three years from the date of the first disbursement, the outstanding soft loan, together with any dues thereon, shall be converted into a secured term loan and the entire loan shall carry an applicable rate of interest as per internal rating of the borrower. The repayment period is generally upto seven years, inclusive of the moratorium up to one-and-a-half years for the term loan and up to two years for a soft loan.

To know more about this startup scheme by the Indian government, click here.

Standup India

Launched in: April 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: Enterprises in trading, manufacturing, or services. In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by an SC/ST or woman entrepreneur. The borrower should not be in default with any bank or financial institution.

Overview: This scheme by the Indian government facilitates bank loans between INR 10 Lakh and INR 1 Cr to at least one SC or ST borrower and at least one woman borrower per bank branch, for setting up of a greenfield enterprise. So far, 3457 online business loans for startups have been sanctioned through the Standup India platform.

Fiscal incentives:

• It offers composite loans between INR 10 Lakh and INR 1 Cr to cover 75% of the project, inclusive of the term loan and working capital
• The stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost
• The rate of interest would be the lowest applicable rate of the bank for that category (rating category) not to exceed [base rate (MCLR) + 3%+ tenor premium]

Time period: This government business loan for startups is repayable in seven years with a maximum moratorium period of 18 months.

To know more about this startup scheme by the Indian government, click here.

Sustainable Finance Scheme

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Green energy, non-renewable energy, technology hardware, renewable energy

Eligibility: Renewable energy projects such as solar power plants, wind energy generators, mini hydel power projects, biomass gasifier power plants, etc, for captive/non-captive use (ie, power generated is sold/supplied to the grid/off-grid).

• Any kind of potential cleaner production (CP) investments including waste management
• Suitable assistance to original equipment manufacturers (OEMs) which manufacture energy efficient/cleaner production/green machinery/equipment
• Either the OEM should be an MSME or it should be supplying its products to a substantial number of MSMEs

Overview: The objective of this startup scheme by the government is to assist the entire value chain of energy efficiency (EE)/cleaner production (CP) and sustainable development projects which lead to significant improvements in EE/CP/sustainable development in the MSMEs and which are presently not covered under the existing sustainable financing lines of credits.

Fiscal Incentives: Suitable assistance by way of term loan/working capital to ESCOs implementing EE/CP/Renewable Energy project provided either the ESCO should be an MSME or the unit to which it is offering its services is an MSME. The rate of interest will be applicable on basis of credit rating of MSMEs.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Since the launch of the Startup India Action Plan and Standup India scheme in January 2016, and the setting up of the Funds of Funds worth INR 10K Cr, more than 50 government schemes for small businesses have been put in place to support early-stage startups in taking off.

These government loans for small-scale industries are a handful of the many initiatives taken by the Indian government to boost the ease of doing business in the country. India ranked 77th in 2018 on the World Bank matrix in ease of doing business.

The government has been working at a macro level to promote entrepreneurship and opening up international startup corridors between India and the world. To this end, the Department of Industrial Policy and Promotion (DIPP) also launched the State Startup Ranking framework, on the basis of which it ranked states on the startup ecosystems, with Gujarat emerging on top of the chart.

At the micro level, the government’s efforts to offer business loans to startups and MSMEs will certainly supplement its larger gameplan and enable more entrepreneurs to turn their ideas into businesses.

The post 10 Business Loans For Startups And MSMEs By The Indian Government appeared first on Inc42 Media.

In today’s social media-crazy world where every product adorned or consumed is shared on Facebook and Instagram — instantly — clothes and accessories have become an extension of one’s personality. But along with increased sartorial consciousness come rising ethical concerns around products using or abusing natural resources.

One such pressing concern is the use of animal skin/leather for making accessories such as bags and shoes. On the flipside, essential substitutes of leather — leatherette, polyurethane, and polyvinyl chloride leather — are adding to the ever-increasing non-biodegradable waste load of the world.

Catch 22 situation, this.

Well, where there’s a problem, there’s bound to be a solution. The above dilemma has given rise to the concept of “slaughter-free leather’ (leather sourced from animals who have died due to natural causes) and ethical tanneries.

As the niche demand for slaughter-free or compassionate leather grows in an increasingly ecologically-conscious world, stylists and designers are cashing in on the opportunity with popular startups like Khara Kapas and Grain. India, which is known for its leather goods the world over, is no exception.

One startup that is redefining people’s sense of aesthetics by the use of compassionate leather is Brandless. Founded by Aanchal Mittal, Brandless has a unique approach to product design — it focuses on day-to-day problems faced by its users and conceptualises products to solve them, while ensuring nothing gets wasted during the production process. “Each product is designed keeping functionality as a priority. We design products to make daily life more organised. However, we pay equal attention to the aesthetics and strike a balance between the two,” says Mittal.

Brandless has come up with exotic leather products — its primary product line comprises travel gear and accessories and it offers a niche line of duffel bags, backpacks, laptop bags, satchels, and other small leather goods. More than just a style statement, Brandless products offer the value-add of utility — think leather pencil holders, charger wraps, bookmarks, earphones protecting holders, and the like. The price points range between $2.81 (INR 200) and $254 (INR 18K).

The Road Less Travelled: The Making Of Brandless

An alumnus of NIFT Delhi, Mittal has worked with renowned designers such as Samant Chauhan and done an internship at Fashion Week. She has a keen understanding of sartorial aesthetics and was irked by the obsession people have with brand names without really understanding the value and aesthetics of the product in question. This is what gave birth to the idea of “Brandless” — both its name and existence. With a belief that a product should compliment the personality of the user and not overshadow it, Mittal came up with the name “Brandless” for her startup.

The inception of Brandless took place in 2014, but the operations were formally launched in 2015 as starting up was difficult for Mittal. First, there was the challenge of bootstrapping, then there was the fact that Mittal had ventured into a male-dominated industry — right from the karigars (craftsmen), labourers, and vendors to producers, most stakeholders are men — and it was no easy task to set up her company from scratch.

Today, Mittal takes pride in the fact that from being a one-woman army working out of a coworking space, Brandless has grown to have a full-fledged team. Brandless today has an average ticket size of $49.13 (INR 3,500) per month with a 35% repeat customer rate.

The startup caters to both men and women in the age group of 25-50 years. The products are available through its website as well as other ecommerce platforms. About 70% of Brandless products are sold on its website and the remaining 30% through other channels. The products are also available at select stores in Delhi, Bengaluru, Mumbai, and Kolkata.

Ethical Style Statement Blended With Functionality

Brandless ensures that it sources leather from ethical tanneries. “The leather we use is a byproduct of animals who are not killed for their skin,” says Mittal.

When coming up with the designs for a particular season, the startup works with vendors to develop the requisite leather, canvas, and lining for the designs. After developing a few samples, work starts on prototypes. Once the design and material are thoroughly tested, the next step is production. “We do not produce very high quantities to make sure that quality is not affected in the process,” says Mittal.

Leather being an expensive luxury good, pricing is a challenge for handcrafted leather accessory manufacturing startups like Brandless, especially while operating in an ever-changing, dynamic market. Which is why Brandless decided to focus on quality rather than on quantity.

Breaking Through The Competition

India has a substantial contribution of around 12.93% to the worldwide production of leather. As per reports, the total leather good exports from India stood at $3.05 Bn during the time period April-October 2018.

Observing the vast potential of the leather accessory market in India, numerous startups have sprung up in the space. Some such names are Nappa Dori, The Sole Sisters, The Black Canvas, The Trunks Company, and The Burlap People. So, among well-known international players offering brand value and emerging domestic startups offering affordability, how do new players like Brandless carve out a niche?

The startup is expanding its product availability through numerous concept stores in India and creating brand awareness by offering services such as corporate gifting. Some of its major clients are Bank of Baroda and Accenture.

Besides, Brandless is spreading its wings beyond Tier 1 cities and exploring the mass untapped potential of customers in Tier 2 and Tier 3 cities. “Our base will be Delhi only but we are expanding our retail points all over India. We shall be diversifying into new product categories this year as well,’’ says Mittal.

Next up, the BrandLess headquarters in New Delhi is all set to become a walk-in studio for clients to experience its products.

Leather Accessories Still A Better Choice. Why?

In the last few decades, the use of leather has become an ethical and controversial matter. But, till the world finds a better and environment-friendly alternative to leather, slaughter-free leather might be the answer to the problem. This is even more significant in a country like India where the leather industry generates 250 jobs for every $200K investment.

From the economic perspective, the leather and leather accessory industry is known for its consistently high export earnings. It accounts as one of the Top 10 foreign exchange earning sources for India. Reports state that the total leather good exports from India stood at US$ 3.05 Bn during April-October 2018. Further, with direct government support and collaboration with international organisations, the leather and leather accessory industry is about to grow even bigger.

Startups like Brandless are contributing to this increasing employment opportunity and aiding the growth of the leather goods manufacturing sector. They are also expanding the scope of the industry by collaborating with artists, organisations, and the labour force from smaller Indian cities. They are also offering employment opportunities at the micro-level for unemployed people, mostly women.

And if, like Brandless, they are sensitive to the importance of animal and ecological protection as well, that’s being ethical on more counts than one.

The post How A Startup Called ‘Brandless’ Is Making A Name For Its Ethical, Functional Leather Products appeared first on Inc42 Media.

The Centre for Innovation, Incubation and Entrepreneurship (CIIE) affiliated Bharat Innovation Fund has led the $3 Mn extended Series B funding round of deep tech startup CreditVidya. The partners at Falcon Edge Capital also invested in their personal capacity in the fresh round of equity funding.

Prior to this CreditVidya raised a $5 Mn Series B funding round in September 2017 and $2 Mn in Series A round in June 2016.

Backed by Matrix Partners and Kalaari Capital, the Mumbai-based B2B company was launched in 2013 by Abhishek Agarwal and Rajiv Raj. It uses advanced data analytics for customer profiling, credit risk assessment and fraud detection services.

At present, the company boasts of having 40 lending partners on board and have processed more than 13 Mn customer applications. The team also claims that their scorecard is two times as powerful and it can help increase approval rates by more than 15% and reduce delinquency by 33%.

“If players like mobile wallets, cab aggregators, original equipment manufacturers want to lend to their large customer base, they can use our tech platform to evaluate borrowers,” added Agarwal.

The company looks to utilise the latest round of funding to scale the business further and get quality investors on the board who can help them with their advisory. It further aims to disburse more than $14 Mn (INR 100 Cr) MSME loans over the next financial year by connecting companies with large user base with traditional lenders.

Other startups in this segment are Paisabazaar, Rupeepower, Bankbazaar, CreditMantri, Rubique among others.

Bharat Innovation Fund is investing actively in the deeptech segment. It announced the first close of its $100 Mn fund in July 2018, after securing around 50% commitments from marquee institutional investors. In November 2018, it also participated in $3.3 Mn funding round of IoT startup DeTect Technologies.

Certainly, deeptech is gaining significant interest from the investor segment. According to Inc42 DataLabs tech startup funding report 2018, deeptech startups gained $151 Mn in funding across 42 deals last year. Here GreyOrange, ThinCL, GoQii, Servify were among the top funding grossers of 2018.

Most recently, venture capital firm Sequoia Capital India has introduced its startup accelerator and incubation programme called Surge and will invest across sectors such as consumer internet, deeptech, enterprise software, healthcare technology, fintech, crypto or direct-to-consumer brands.

The post Deeptech Focussed Bharat Innovation Fund Leads Extended Series B Round In CreditVidya appeared first on Inc42 Media.

This article is part of Inc42’s special year-end series — 2018 In Review — in which we will refresh your memory on the major developments in the Indian startup ecosystem and their impact on various stakeholders — from entrepreneurs to investors. Find more stories from this series here.

“The value of an idea lies in the using of it.” — Thomas Edison

The cup of ideas runneth over in the Indian startup ecosystem. A good idea is the genesis for any successful startup, but sometimes just having a good idea is not enough.

According to the findings of a survey by the Institute for Business Value and Oxford Economics, 90% of India’s startups fail within the first five years. It added that the lack of pioneering innovation is the major reason for the failure of Indian startups — in essence, they are copycats of startup ideas of the West, the study said.

Turns out, almost half of the Indian startups are actually not needed at all.

It is the absence of scalable ideas that makes 9 out of 10 Indian startups sink like lead balloons, despite the best intentions of founders and investors. The lack of originality is clear from this caveat— Despite being the third largest startup ecosystem after US and China, the number of international patents India has applied for in 2015-16 was only 1,423 whereas Japan’s count stood at 44,235, China at 29,846 and South Korea at 14,626.

This shows the clear mismatch between the number of startups mushrooming and the extent of innovation in the country compared to others.

As per Inc42’s The State of The Indian Startup Ecosystem 2018 report, more than 10K Indian startups have shut their operations so far.

While failure is a hard pill to swallow, it is also a great teacher. For a startup founder, there is no bigger disappointment than seeing the product of their efforts come to nought. However there is also the flipside — if you’ve never failed, you’ll never know what works.

With 2019 just a couple of days away, we at Inc42 have compiled a list of the biggest failed Indian startups of the year. As late-night talk show host, Conan O’Brien said, “Through disappointment one gains clarity and with clarity comes conviction and true originality”  

Indian Startups That Shut Shop In 2018

Just Buy Live: May Not Rise From Ashes After All

Overview

Just Buy Live connected retailers to buy goods directly from brands across multiple categories such as food, drinks, personal care, auto, smartphones, fashion, stationery, etc. The startup also offered an unsecured credit lending to small and medium enterprises (SMEs) to facilitate the transaction on its portal and provide working capital to small retailers. In August 2017, the startup raised $100 Mn (INR 699.25 Cr) Series B funding from a Dubai-based investment firm, Ali Cloud Investments.

Why it failed

Various reports claim that Just Buy Live may have shutdown due to an unscalable business model and negative cash flow. As per Entrackr’s report in March this year, Just Buy Live’s cofounder said that the company has temporarily been shut down and would resume operation after raising fresh funding. Its website is currently down.

Shotang: It Tried But Failed

Overview

 Shotang was a business-to-business (B2B) online marketplace that connected retailers, distributors and manufacturers to discover, transact and manage their business online using their platform. Its main products were mobiles and apparel. It earned revenue through commissions paid by distributors per transaction.

Why it failed

 At its peak Shotang had a $40 Mn (INR 279.7 Cr) market valuation. It had last raised $864K (INR 6.8 Cr) from Patamar Capital in February this year, and $5 Mn (INR 35.94 Cr) from Exfinity Venture Partners in December 2015. Techcircle cited an anonymous person saying that the money it last raised was “primarily meant to pay off creditors, employees, partners. It tried but failed.”

It is likely that the business was forced to scale down its operation amid fierce competition from the likes of Flipkart, Amazon and Paytm Mall.

PortDesk: Cause Of Death Unknown

Overview

PortDesk provided an e-procurement software solution for logistics management for port-related operations such as accounting, cash management, ports DA estimate and voyage, layout and contract management.

Why it failed

 In June this year, it was reported that PortDesk has shutdown its business, however, the reason is still unknown. Only a year earlier, the startup had raised $2 Mn (INR 13.98 Cr) in a seed funding round from a Singapore-based maritime services company, Alphard Maritime Group. The startup’s founder Pushpit Pallav was not reachable for comments.

Zebpay India: Shut Down Over Policy Stalemate

Overview

Undoubtedly India’s largest crypto exchange, Zebpay (till its closure) enabled users to buy and sell Bitcoin and other cryptocurrencies such as Bitcoin Cash, Ripple, Ethereum, and Litecoin, or to purchase airtime and gift cards. According to its website, it had over 3 Mn users.

Why it failed

Zebpay decided to down its shutters in the aftermath of the circular issued by the Reserve Bank of India (RBI) on 6 April 2018, restricting banks and regulated payments companies from extending any services to crypto exchanges and wallets.

Many Indian cryptocurrency exchanges, as well as crypto groups, soon knocked the doors of the Supreme Court which, after multiple hearings, has listed the matter for further hearing in January next year.

However, amid the lack of crypto rules and regulations in India, Zebpay, on September 28, 2018 announced its closure. In a statement, it said, “At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.” The crypto exchange, however, continues to allow users to deposit and withdraw coins/tokens into their wallet.

Since then, the situation has only worsened — the founders of Unocoin, another leading crypto exchange, were arrested on October 23 by Bengaluru Police over a Bitcoin ATM installation.

Not only Zebpay, a slew of exchanges including Coinsecure, BTCXIndia, MoneyTrade, Bitconnect and more shut down for various reasons this past year.

BabyBerry: Missing In Action

Overview

Online parenting app Babyberry helped parents of a newborn baby to provide the best possible care for their child’s holistic growth and development from physical, cognitive, social to emotional growth. The app included features such as digital vaccination chart and reminders, health records management and access to the nearest doctors based on geolocation.

Why it failed

 It is uncertain as to what lead BabyBerry to shutdown its operations. Its website is pulled down, it hasn’t posted any feeds on its social media since October last year, nor any queries to the founders could elicit any response. In August this year, a report had cited its founder saying that the startup is currently looking to solve technical errors on the platform after many of its customers reported the glitches. Notwithstanding, the startup had raised $1 Mn (INR 6.99 Cr) in 2016 meant for product development and marketing.

Mr Needs: Has Anybody Seen MrNeeds?

Overview

MrNeeds offered consumers an online subscription-based service for the delivery of products such as milk, bread, eggs, and other grocery items. In June 2017, ET had cited Wadhwa saying that its “per delivery costs are 50% to 70% lower than the industry standard,” and was serving 36K monthly orders for 9K families across Noida.

Why it Failed 

The startup has pulled down its website, and is mobile application is not found anymore on Google’s play store. It is, however, not clear as to what lead the startup to shut its operations. It is likely that the startup closed down its shutters amid fierce competition from the likes of BigBasket, DailyNinja, and others. Inc42’s efforts to reach out to the founders have gone unanswered.

Tazzo Technologies Shuts Amid Funds Crunch

Overview 

Bike rental startup Tazzo was focussed on point-to-point commuting service and charged INR 5 per km. Its mobile application was integrated using GPS technology and tracked every movement of its entire fleet in real-time, including overspeeding, theft, etc.

Why it failed

According to Deepak Shahdadpuri, founder and MD of DSG Consumer Partners — one of Tazzo’s investors — the startup failed to prove a profitable product market fit which led to drying up of funding. In October 2016, the startup had raised about $225K (INR 1.5 Cr) seed funding from DSG , but the capital-intensive nature of the sector it catered too, and the lack of profitable business model, forced the startup to halt its operations in September this year.

Ezytruk: Dearth Of Follow-On Funds

Overview

Trucks and logistics platform Ezytruk connected carriers, shippers and original equipment manufacturers (OEMs), to enable systematic transportation of goods. It offered services such as price comparison between carriers, real-time information of the goods, warehouse space management, etc.

Why it failed

 Ezytruk had raised a seed funding of $147K (INR 1.02 Cr) from Dubai-based investors Ajith Nair and Anish K in January 2017. However, the startup could not scale and grow further as it was unable to raise further rounds of funding, reported Techcircle, which ultimately led the founders to shutdown the operation this year.

Wydr: Slips On Falling Performance

Overview

 B2B wholesale marketplace Wydr offered a range of products across categories like fashion, home, automotive and electronics to manufacturers, wholesalers, and retailers. The platform allowed sellers to customise their requirements, negotiate prices, and instantly close deals. As at February 2018, the startup claimed to have added over 10K manufacturers and distributors across cities in India.

Why it failed

 A report by Entrackr on November 3 cited ShopClues cofounder Sandeep Aggarwal and an early investor in Wydr as confirming the shutdown. The report said that “the company (Wydr) was scaling down for the past three months and finally pulled the plug a couple of days ago.” An email query sent to Wydr did not elicit any response. Its official website (www.wydr.in) is currently pulled down.

Monkeybox: Not An Out Of Box Idea?

Overview

 Monkeybox provided Recommended Dietary Allowance (RDA) – approved vegetarian meals for kids in the age group of 3-18 at school. As on July 2017, the company claimed to be supplying over 1,500 meals per day to more than 85 schools in Bengaluru, with over 2K subscribers on its platform.

Why it failed

The Blume Ventures-backed foodtech startup shut down its operations amid much surprise and speculation. On one hand, the startup had been making quite a few acquisitions — such as food delivery company 75 In A Box, juice delivery startup RawKing — and, on the other, there was speculation that it was shutting down as it had failed to garner the required revenue to stay afloat amid fierce competition. On March 23, Monkeybox published a statement saying that “the operation will be temporarily terminated.”

However, the termination was final. Its official website (www.monkeybox.in) was pulled down.

Companies That Closed Their India Operations

Apart from Indian startups that shut shop, there are some companies that ceased their operations in India after facing stiff competition and declining revenue. Here are the top top international companies whose India operations were shut down this year.

eBay Bows Out Of India

Overview

Walmart-owned ecommerce company Flipkart acquired the Indian arm of global retail company eBay in March 2017 for an undisclosed amount. Like any other ecommerce platform, eBay facilitates consumer-to-consumer and business-to-consumer sales through its website.

However, the big difference between eBay and the others is it enables trading on its platforms both in an auction or a fixed price sale. In a buyer’s auction, buyers bid for a specific product and in a seller auction, different sellers bid their fixed price for a single product and the buyer chooses the best offer.

Why it failed

 In May this year, eBay announced that it was ending its partnership with Flipkart and also forbade the latter to use the eBay.in brand. As the partnership ended, Flipkart migrated eBay India sellers and customers to its platform. Although being among the first players in India’s ecommerce space, eBay couldn’t actually rake in much revenue and faced fierce competition from Flipkart and Amazon.

As the company slowed down, and before Flipkart took over, eBay India had fired more than 350 employees from its Indian arm.

The reasons for eBay’s failure in India have been many: the marketplace model was ahead of its time (eBay launched in 2005); there was no guarantee of product quality for either the buyer or the seller, and Indians never really warmed up to the idea of online auctions.

The company CEO, Devin Wenig, has announced eBay will be relaunched with a new business model in India.

Ofo: India Gamble Backfires

Overview

 The Alibaba-backed Chinese dockless bike rental company, Ofo, offered bicycles for rent on campuses and gated communities across New Delhi, Indore, Bengaluru, Ahmedabad, Pune, Coimbatore, and Chennai. At the time of announcing its India operations, the company claimed to have completed 1 Mn rides across seven countries.

Why it failed

 Ofo’s move to shut down its dockless bike renting service in India is part of company’s strategy to scale down its operations in international markets, including countries such as Australia, Austria, Czech Republic, Germany, and Israel.

Ofo maintains that the move is aimed at remaining profitable. Techcrunch cited Ofo France general manager Laurent Kennel as saying that the company would focus on “mature and promising markets” such as Singapore, the US, the UK, France, and Italy. Moving forward, it is believed to be communicating with local markets about its plans.

Acquisitions And Shutdowns

Tapzo 

Overview

 Tapzo was an “all-in-one” app that used to aggregate more than 35 different apps in one place, across categories such as cabs, food, recharge, bill payment, news, cricket, horoscopes, and more. Tapzo’s numbers were definitely impressive: 14,000 daily user base, 55K daily transactions, and an annual run rate (ARR) of INR 210 Cr in GMV/bookings.

Tapzo’s reduced valuation at its last funding round can be considered as a trigger towards its shutdown. Tapzo raised $1.9 Mn (INR 13.28 Cr) in December 2017 from existing investors RB Investments Pte Ltd and Ru-Net South Asia at a post-money valuation of $47.3 Mn (INR 308 Cr) — nearly 50% less than its valuation in the previous round — $85.54 Mn (INR 600 Cr).

Around mid of 2018, in August, the startup got finally acquired by Amazon. After the acquisition, Amazon has merged the entire Tapzo team with Amazon Pay, and it was working in the backend. Media reports said that Tapzo’s founders are likely to get on board Amazon Pay’s team in India.

Holachef

Overview

HolaChef was a food aggregator that connected customers with chefs across the city, offering a new menu selection every day as per its website. Before shutting its operations three months back, the company was managing packaging, storage and delivery of the food.

The startup was shut down around May 2018 amid a cash crunch. A media report in August has suggested that Kalaari Capital and India Quotient had already resigned from the board of directors of HolaChef earlier in the year.

With the increased dominance of players like Foodpanda, Zomato and Swiggy in the online food delivery market, investors lost interest in the startup. This was coupled with a market correction to make things worse. The last funding raised by Holachef was in February this year when it raised $28,602 (INR 20 Lakhs) in Series B round.

Foodpanda pounced on the chance, acquiring the startup for cheap — the deal was said to fetch minimal returns HolaChef investors. For Foodpanda, the acquisition was an attempt to test waters in the cloud kitchen space, which its bigger rivals Swiggy and Zomato were already exploring.

A Parting Thought

A cursory glance at the startup shutdowns reported by Inc42 in the past three years shows that of the 32 startups that ceased their operations, most of them were from sectors such as consumer services, ecommerce, and fintech sectors. However, these sectors were among the top trending sectors in 2018, attracting investment, mergers, acquisitions, and new ventures. In fact, these are sectors that are expected to do better than all other sectors as well.

Goes to prove that it’s not all about the idea, doesn’t it?

What startups can learn from these stories is to buckle up their business strategy, take stock and identify even the most minuscule problems, and start rectifying them, immediately. They can also sleep on the fact that an idea — or even market demand — doesn’t alone make a brilliant startup. It’s also about execution and the right time, right place. As Edison also said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

(Cowritten by Dipen Pradhan, Meha Agarwal and Suprita Anupam)

Update 1: Holachef and Tapzo have been acquired and not shutdown as was wrongly stated in an earlier version of this article. 

Update 2: Bike rental startup Tazzo was unable to raise additional funding as it failed to prove a profitable product-market fit. We have updated the article to ensure clarity.

The post 2018 In Review: 10 Of The Biggest Startup Failures In India appeared first on Inc42 Media.

With a steady eye on the upcoming General Election 2019, the Interim Budget of the BJP government for 2019 will likely be strong on optics and populist measures. In the absence of Union finance minister Arun Jaitley, who unexpectedly left for the US for medical reasons, the Budget will be presented by interim finance minister Piyush Goyal.

Considering that the outgoing Modi government has launched more than 150 schemes and policies — all of which were personally flagged off by Prime Minister Narendra Modi —  everyone’s interest has been piqued, despite this Budget being a vote-on-account one.

As appears from President Ram Nath Kovind’s address to the Parliament while opening the Budget Session, healthcare and agriculture will be the focus areas for Goyal. Among the government’s flagship schemes, Ayushman Bharat, MUDRA, Startup India, Digital India, and Skill India are expected to get a fair share of budgetary allocation.

Besides, the startup ecosystem fraternity expects Goyal to address numerous policy-related issues which have been acting as a roadblock for startups and investors. In Inc42’s Budget Survey 2019, 25% of startups and investors chose the angel tax issue as the biggest problem that needs to be resolved.

Other key expectations of startups from Union Budget 2019 can be summarised under the following themes:

• Need a policy thrust to increase digital transactions
• Address the issue of ‘ease of shutting down’
• Tax holiday for government-registered startups from 3 to 5 years
• More clarity on disbursal of Fund of Funds
• Clarity on tax on ESOPs

Inc42, spoke to dozens of startups, investors, and industry experts to understand and voice their demands for their respective sectors. Here’s what they have to say:

• Fintech Startups Demand Tax Rebate, Liquidity And Policy Reforms
• Edtech Startups Demand GST Be Cut From 18% To 5%, Reskill India And More
• Healthtech, Epharma Startups Demand A New Medical Innovation Fund
• EV Startups Demand Reduction In Import Duty, GST And Better Charging Infrastructure
• E-commerce Retail Logistics: What The Ecosystem Expects From Budget 2019
• Inc42’s Budget Survey 2019: Angel Tax Exemption, Fund of Funds Implementation Top Priority

Now that you know what matters to the Indian startup ecosystem, scroll down to read today’s Union Budget live updates and its impact on the startup ecosystem.

Union Budget Highlights

A Special Mention To India’s Booming Startup Ecosystem By The FM

Piyush Goyal: India has become 2nd largest hub of startups.

Inc42 Take: According to NASSCOM, India is the third-largest startup hub based on the number of startups, while Israel is looking to compete with the country and claim the third position. Interestingly, the annual funding report by Inc42 DataLabs showed that India has been witnessing a decline in funding deals and amount. Currently, India stands at the 57th position in the Global Innovation Index out of 130 countries.

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12:25 PM

More Power To MUDRA Loans But Has It Missed The Mark?

Piyush Goyal: Allocation for Mudra loans kept at INR 4 Lakh Crore. More than 70% of MUDRA yojana beneficiaries are women.

Inc42 Take: While no official or unofficial data exists to prove it, an analysis by India Today claimed that only 3% Mudra loans can generate a monthly income of more than INR 10,000. Further, the analysis showcased that 40% of the Mudra funds are not being put to use. Former RBI governor Raghuram Rajan had once mentioned that collateral-free loans such as Mudra are more prone to turning into non-performing assets (NPAs).

Mudra stands for ‘Micro Units Development and Refinance Agency Bank. It provides loans at low rates to micro-finance institutions and NBFCs, which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.

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12:20 PM

Will Put An Indian In Space By 2022, Says Goyal

Piyush Goyal: India to be the launchpad in the world with Gangayaan Mission with an aim to place Indian astronaut in space by 2022.

Inc42 Take: Currently, space tech startups are struggling to get funding. Also, following recent reports on ISRO cancelling the contract of Team Indus as of Jan 19, 2019, this step by the central government may bring some hope for the sector.

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12:15 PM

More Talk About EVs But No Action

Piyush Goyal: India will lead the world in transport with EV and renewable energy, making India a pollution free nation.

Inc42 Take: The timeline is still quite uncertain as no concrete initiatives, regulations, and frameworks are in place, other than the government’s much-delayed FAME Scheme — Faster Adoption and Manufacture of (Hybrid and Electric Vehicles). With pollution and worsening air quality levels at urban centres being a core issue in cities such as Delhi, a call for more clarity in such initiatives of government is long overdue.

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12:13 PM

A Welcome Move: More GST Reforms For Businesses

Piyush Goyal: Businesses with less than INR 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to file return quarterly returns.

Inc42 Take: This is a welcome move for small-sized companies as they will be able to pay income tax at quarterly intervals. This will help to ease the cash flow of the companies.

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12:11 PM

A Wider Tax Base?

Piyush Goyal: More than 1 Cr people filed income tax for the first time after demonetisation.

Inc42 Take: India’s tax-GDP ratio is still abysmally low. This is largely due to the low direct tax base and India having a huge unorganised sector. While the demonetisation brought the unbooked income to light and led to increased annual income tax turnover, small and micro enterprises with borrowings of under INR 1 Mn are yet to fully recover from the move. This initiative has, however, upped the ‘formalisation’ of the economy, which is seen as an increase in ‘new to credit’ MSMEs at 4 Lakh units in the second half of 2017, as compared to over 2.7 Lakh a yeara go.

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12:01 PM

On Easing Income Tax Compliance

Piyush Goyal: All income tax returns to be processed within 24 hours and refunds to be issued simultaneously. Tax scrutiny will also now be done electronically and there will be no interaction between the tax authority and the taxpayer. Also, businesses with less than INR 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.

Inc42 Take: This is good news for small companies. Instead of making a bulk income tax payment, they will now be able to do it quarterly, helping ease the cash flow of the company.

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11.58 AM

Good News For Entertainment Startups

Piyush Goyal: The entertainment industry will be a major employment driver of jobs and income. Single window clearance for movie shooting now available to all Indians as well, which was earlier was only limited for foreigners.

Inc42 Take:  Startups in the entertainment industry had been restricting themselves to producing viral video content. However, this initiative may provide a huge impetus to the production houses and innovative streaming services.

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11.56 AM

1 Lakh Digital Villages In The Next 5 Years?

Piyush Goyal: Our government hopes to create 1 Lakh digital villages in the next 5 years. Jan Dhan, Aadhaar mobile, and direct benefit transfer have been game changers. Aadhaar is now near-universally implemented and has helped ensure the poor get the benefit of government schemes directly in their bank accounts.

Inc42 Take: With the increase in smartphone and internet reach, schemes such as Jan Dhan, Aadhaar mobile, and direct benefit transfer have been game changers in the last four years. Post months of discussions on the validity of Aadhaar, it is now near-universally implemented and has really helped ensure the poor get the benefit of government schemes directly in their bank accounts.

The cost of data and voice calls in India is now possibly the lowest in the world; mobile and mobile part manufacturing companies have increased from 2 to 268.

With the government’s target to build 1 lakh digital villages in the next 5 years, we hope to witness increased financial inclusion in rural India. Also, this will increase the reach of urban startups to the currently untapped rural segment in perhaps all areas but particularly in digital payments and ecommerce.

Also, with deep-pocketed companies like eBay, Amazon India, Walmart, Reliance Retail, Future Retail entering both these segments and the rise of UPI, this can be a game-changer for Indian startups in the vernacular segment as well.

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11:51 AM

Goyal Boasts About India’s Climate Change Efforts, But Ground Reality Is Different

Piyush Goyal: India provided leadership to the global climate change effort. Our commitment to promote renewable energy is reflected in our initiative to set up the International Solar Alliance. Our installed solar generation capacity has increased 10 times in the last five years; lakhs of new jobs being created by the sector.

Inc42 Take: In line with the UN Paris Climate Change Summit 2015, India has taken a number of initiatives towards the adoption of cleantech and electric mobility. These initiatives have even been applauded at various international forums.

Considering 9 out of 10 of the most polluted cities in the world are in India, EV production and infrastructure development is the need-of-the-hour.

However, typical of the Indian government’s policy flip-flops and avoidance, no policy has been formulated so far to meet the electric mobility mission. The National Electric Mobility Mission Plan (NEMMP) aimed to have 6-7 Mn EVs by 2020, but we’re nowhere close to the target even 8 years later. Instead, we saw an announcement by the minister that India is targeting going 30% electric by 2030.

According to the FAME India Scheme, the total number of electric vehicles sold in India still stands at 2,64,953, with a yearly production of around 22K per year. In contrast, China sells over 870K EVs per year, accounting for 35% of the world market supply.

While there is no EV action plan or policy implemented yet, the government has simply extended the FAME subsidy scheme on an ad hoc basis till March 31. This, on its own, won’t encourage manufacturers to invest in EVs, which demand huge investments.

However, with conglomerates like SoftBank investing in India’s renewable energy sector, India is making substantial progress in the renewable energy sector. The installed solar generation capacity in the country has increased 10X in the last five years. Also, a number of schemes have been rolled out by the government to boost the renewable energy sector.

A lot more needs to be done. There lie skill and infrastructure gaps which the government needs to address. According to reports, India will be unable to meet its commitment to generate 175 GW energy by 2022 as the sector is plagued by policy inconsistencies and discom problems. India is aiming for a 40GW (40,000 MW) capacity solar rooftop by 2022 but has been able to install only 1334 MW grid-connected solar rooftops till November 2018.

Indian startups can certainly play a crucial role here with their innovative ideas, social impact, and reach out to untapped segments. With government’s inclination towards the sector, increased investor interest is also expected in the near term.

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11:48 AM

In Good News For Defence Startups, Goyal Commits Additional Funds For Defence

Piyush Goyal: We had promised to implement ‘One Rank One Pension’. We have already disbursed over INR 35,000 cr after implementing the scheme in true spirit. For securing our borders, govt increases defence budget to over INR 3 lakh crore. Will provide additional funds for defence if needed.

Inc42 Take:  There is good news for the ailing defence sector — the budget has been enhanced to over INR 3 lakh cr. The Modi government, to its credit, has brought startups into the defence space over the last few years. With a view to leverage defence-related startups and strengthen their collaboration with the defence forces — the Indian Army, Navy, and the Air Force — the government had launched the Defence India Startup Challenge on August 4, 2018.

A joint initiative of the Atal Innovation Mission, the Department of Industrial Policy and Promotion (DIPP), and the Defence Innovation Organisation (a ministry of defence initiative), the Defence India Startup Challenge aimed for startups to innovate defence solutions in 11 categories.

Along with the challenge, the defence minister also launched a number of initiatives to support startups working in defence and increase their engagement with the Indian forces. The overall objective was making India self-reliant when it comes to meeting its national defence requirements.

If the government is ready to back the scheme with more funding, it is definitely good news for startups.

However, credit usually comes with its fair share of criticism. On one hand, participating startups have earlier shared with Inc42 the sluggish nature of the Defence India Startup Challenge, where dates are extended often. Meanwhile, any war veterans have not been given benefits of the ‘One India One Rank pension’ scheme, which also reflects the limited applicability of the scheme, which the government claims — is a historic one.

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11.47 AM

Boost For Small Businesses: Faster Loans & Sourcing For SMEs, Women-Owned Enterprises

Piyush Goyal: We will source 25% material from SMEs and 3% from only women-owned SMEs for government industries. AI-based technology to be implemented for the upliftment of the MSME sector.

Inc42 Take: Goyal said that 9 AI portals will be made operational in India. However, the minister did not provide any clarity on data privacy and data protection. He also added that the government’s dedicated website for MSME borrowers offers automated processing of loans, which provides in-principal approval in less than an hour. The website reduces the turnaround time from 20-25 days to 59 minutes. Following the approval, the loan will be disbursed within a week. The commitment to source 25% material from SMEs and 3% from only women-owned SMEs will certainly bring up more small businesses in the country and have a direct impact on startups.

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11.45 AM

More LPG Connections To Drive Women’s Empowerment Initiatives

Piyush Goyal: 8 Cr free LPG connections will be provided under ‘Ujjwala’ Yojana.

Inc42 Take: This move can be considered as an important step towards women empowerment. As observed in the Rajasthan Yatra by Inc42, women’s empowerment in rural areas has been an important mandate for the government. According to 2015 data by United Nations Human Development Index, India stands at 135th position among 147 nations on women’s empowerment.

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11.40 AM

INR 500 Cr Mega Pension Scheme For Unorganised Sector

Piyush Goyal: A Mega Pension scheme of INR 500 cr for the unorganised sector, which will see an equal contribution from the government. A pension of Rs 3,000 is to be paid out per month to unorganised sector workers after retirement. About 10 cr workers will benefit from the scheme.

Inc42 Take: Ahead of the election, Goyal has announced a new pension scheme for workers and labourers from the unorganised sector, which will increase the Centre’s contribution to the sector by 4%. The pension amount has been increased from INR 3,500 to INR 7,000 per month.

The new pension scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide an assured monthly pension of INR 3,000 per month, with a government contribution of INR 100 per month, for workers in the unorganised sector after 60 years of age.

During Budget 2015-16, finance minister Arun Jaitley had announced the Atal Pension Yojana (APY) as part of the National Pension Scheme. Similar to the pension scheme announced today, the APY too was focussed on all citizens in the unorganised sector who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA).

Now, the government has announced another pension scheme with a budget allocation of INR 500 Cr. Clearly, the interim Budget seems to be interim in nature.

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11:27 AM

Small, Marginal Farmers To Get INR 6,000 Per Year In Direct Transfer

Piyush Goyal: Govt has approved for small and marginal farmers with land of up to 2 hectares. The government also give direct income support of Rs 6,000 per year to every small farmer. Poor farmers will get cash in three equal instalments under PM Kisan scheme along with increased Kisan credit limit. Goyal also announced a 2% interest subvention to farmers pursuing animal husbandry and fisheries.

Inc42 Take: The scheme will categorically benefit the majority of the landless farmers and will also prove to be a huge push to improve the income of the farmers. It will also have an indirect effect on the agritech startups which are working for improving the soil treatment and crop yield. However, the scheme would not affect the supply chain startups as the crop distribution system will remain centralised.

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11.26 AM

Scope For Startups In Animal Husbandry

Piyush Goyal: 2% interest subsidy to given to farmers involved in animal husbandry

Inc42 Take: The incentives will be passed on through the Kisan Credit Card scheme. Also, an additional 3% subsidy will be offered for timely payment of loans. This move is indicative of the government’s efforts to further push the agricultural community towards the digital economy. At the same time, this will be another opportunity for digital payment and agritech startups to align with the needs of the farmers, in line with the government’s efforts.

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11.25 AM

Pradhan Mantri Kisan Samman Nidhi Scheme Approved

Piyush Goyal: The Budget aims to provide assured income support to small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi initiative. Under this initiative, INR 6K per year per farmer will be transferred directly to farmers’ bank accounts in three instalments. Farmers with less than 2 hectares landholding are eligible for the scheme.

Keeping in view the distress in India’s agricultural sector, the government has also revised the minimum support price (MSP) in favour of farmers. Small and fragmented landholdings have led to a decline in farm income. 

The programme will be effective December 1, 2018, and the money will be directly transferred into farmers’ account. The expected spend on this scheme is INR 75,000 cr, said Goyal.

Inc42 Take: The initiative is in line with the government’s initiative to eliminate middlemen and help farmers realise better prices for their produce. Agricultural growth in India has been fairly volatile over the past decade, ranging from 5.8% in 2005-06 to 0.4% in 2009-10 and -0.2% in 2014-15. The decision is expected to improve the situation.

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11:24 AM

10 Lakh People Treated Under Ayushman Bharat So Far

Piyush Goyal: We organised the world’s largest healthcare programme — Ayushman Bharat — for 50 cr people; 10 lakh have benefited from the programme. We also opened the 22nd AIIMS in Haryana. Ayushman Bharat, the world’s largest healthcare programme, was launched to provide medical care to almost 50 cr people, resulting in savings of INR 3,000 crore by poor families.

Inc42 Take: As expected, interim finance minister Piyush Goyal spoke in length about the Modi government’s healthcare initiatives, the biggest among them being the world’s largest public health insurance scheme — Ayushman Bharat — launched last year.

The initiative is in line with the National Health Policy, which aims to double the government spend on healthcare — from 1.15 % of the GDP to 2.5% of the GDP by 2025. However, the budgetary allocation of INR 52,800 Cr for health in 2018-19 was hardly 5% higher than that of 2017-18 (INR 50,079.6 Cr).

Ayushman Bharat enables private players, including healthtech startups, to provide healthcare infrastructure on the basis of PPP models.

However, there isn’t much clarity yet on the Budget allocation for this health insurance programme, which claims to provide insurance to the common man of up to INR 5 lakh per family per year for hospitalisation expenses.

Increasing medical inflation is, however, adding to the worry to private players.

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11:22 AM

Electricity: Way To Drive Digitisation

Piyush Goyal: Everybody will get an electricity connection in the near future. We have provided 143 crore electricity bulbs to the poor in the last few years.

Inc42 Take: Goyal’s statement was met with heavy cheering from government supporters as well as booing from the opposing party members. Increased availability of electricity will automatically drive digitisation growth and increase internet penetration. Currently, internet penetration in rural India is 21.35%. This growth is set to help the consumer startups expand their reach as previously this was a major roadblock for startups to expand beyond Tier I cities.

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11.10 AM

‘Govt Has Achieved Macro-Economic Stability In Last 5 Years’

Piyush Goyal starts by recounting the achievements of the Modi-led government. Goyal claims that India has enjoyed the best phase of macroeconomic stability in the past 5 years. The fiscal deficit was 3.4% of the GDP for the financial year and has been set at 3.4 per cent for the next fiscal as well.

Inc42 Take: With a declining fiscal deficit, the central government may increase its allotment of funds for agricultural and infrastructural development to facilitate the prosperity of other industries. However, as the fiscal deficit target was set at 3.3% for 2018, the government has missed the target and has also increased the fiscal deficit estimate for the next financial year to 3.4%. This shows that the deficit is still essentially an unsolved problem.

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The post LIVE Union Budget 2019: Live News, Analysis And Impact On Indian Startups appeared first on Inc42 Media.

Interim finance minister Piyush Goyal, while announcing the Union Budget 2019 earlier today (February 1), said something that must have made every startup ecosystem stakeholder’s heart swell with pride — “India has become the second-largest hub of startups.” As the vanguard of the ecosystem, it sent us, at Inc42, scrambling to our datasheets to verify and validate the claim, if possible.

So, is India The Second-Largest Startup Ecosystem In The World?

India is home to the world’s second-largest population. Understandably, the number of businesses in the country is high compared to many other leading startup nations. According to Inc42 DataLabs, India is home to close to 39,000 active startups and growing. While this might make us the second-largest startup hub in terms of sheer startup numbers, all the key indicators of the market and economy state otherwise.

Does the number of startups define the quality of the ecosystem?

Well, the short answer is no.

While the claim that India is the second-largest startup hub globally sounds lofty and something any country would aspire for, we’re still not quite there. This claim can be validated only if we rely on sheer numbers to showcase India’s startup prowess. The real scenario emerges only when we evaluate the other factors that define a startup ecosystem.

If we put the absolute number play aside, here are the other defining, all-important stats:

If we look at the above parameters, India is clearly not the 2nd largest startup hub in the world.

A quick look at the market and economic factors that determine the prosperity of a business ecosystem shows India has a long road to cover before it can achieve the standard to rank up with leading startup ecosystems like the US, China, and the UK.

In the graph below we have represented the Index of Economic Freedom which is poised to help readers track, over two decades, the advancement in economic freedom, prosperity, and opportunity and promote these ideas in their homes, schools, and communities.

So, Why Doesn’t India Measure Up?

As we can see in the charts above, India lags far behind in terms of the intrinsic requirements for a prosperous business ecosystem.

When we speak of the prowess of any business ecosystem in India, we must consider the following facts:

• Establishing a legal entity in India for business is still a very cumbersome process comprising of at least 12 steps and costing 49.8% of the per capita income in India.
• It takes almost a month (27 days) to complete these procedures on average, which is well above the OECD (Organisation for Economic Co-operation and Development) average of 12 days.
• Registering a property requires quite a bit of legwork and can also incur substantial costs.
• A stamp duty of 5% of the property and a 1% charge on the market value of the property incurred at the Sub-Registrar of
• Assurances are the two fees to look out for, although the lawyer charges and fees at the Land & Survey Office can also pinch.
• It takes 4.3 years to resolve insolvency in India, far longer than the South Asian and OECD average. The laborious court system can often slow down business relations.

One of the essential parameters of measuring the quality of a startup hub is the innovation that comes out of it. India’s startup ecosystem, for all our tall claims, is nowhere near the top. According to the Bloomberg Innovation Index 2019, India has been ranked a lowly 55 in the world. And, interestingly, it is the first time that India made it to this position in the Bloomberg ranking.

Startup ecosystems are also measured by the number of intellectual property rights (IPRs) they hold. Going by the number of patents filed by India in 2017, it does not even count among the top 10 countries in the world.

While the Indian government has been providing 80% exemption to IPR filings, and many Indian states even provide exemption for the remaining 20%, there are a slew of policy-related matters that been acting as a roadblock for the Indian startup ecosystem.

Among these are angel tax, lack of proper funding infrastructure, the low success rate of tax exemption under Section 80-IAC, and various state government’s apathy towards startups.

For almost six years now, startups have been asked to cough up an angel tax of 30.9% on share premiums, which has adversely affected angel investments in India as it has created a negative investor sentiment. Since 2016, angel investments in the country have been consistently coming down between 2017 and 2018 as per Inc42 DataLabs estimates the number of deals have plunged by 40%.

In the last one year, the Indian government has taken some initiatives like keeping a set of startups registered with the Department for Promotion of Industry and Internal Trade (formerly the Department of Industrial Policy & Promotion) outside the ambit of angel tax, yet, angel tax continues to be a bane for startups.

Lack of regulation, a traditional taxation framework (including the angel tax), and cumbersome processes make it difficult for startups to even start up, let alone prosper and grow.

While the Indian economy may be growing at the highest rate globally, India is yet to become the second-largest startup hub in the true sense.

We did our math. We hope the government digs into its data, too, and realises and addresses the pitfalls in the path of India becoming the second-largest ecosystem in the world.

[Co-written by Ankan Das and Sandeep Singh]

The post Union Budget 2019: Is India Really The 2nd Largest Startup Hub In The World? appeared first on Inc42 Media.

India today is home to more than 39K startups. The Indian startup ecosystem is producing unicorns at double the speed than before, with multi-billion dollar fundings from global investors, and celebrating high-profile exits such as the $16 Bn Walmart-Flipkart acquisition last year. At the same time, the country’s micro, small, and medium enterprises (MSME) sector comprising 577 Cr companies is beating challenges of setting up and building the consumer base, among others.

But an idea remains an idea if it does not get the requisite working capital on time. According to reports, less than 5% of MSMEs have access to formal credit, while others rely on informal sources to fund their businesses. For Indian startups, while there are a number of private equity and debt funding options available, to get funding at the idea or early stage is a challenge.

In a much-needed move to address this gap, the Indian government has rolled out initiatives to offer business loans for startups and MSMEs through authorised channels. Among the several MSME schemes for entrepreneurs, one of the most important ones was the recently-launched 59-minute loan platform that enables easy access to credit for MSMEs.

Also, the Small Industries Development Bank of India (SIDBI) has started lending to companies directly instead of through banks. These government loans for startups are at least 300 basis points lower than the ones that are offered by banks. SIDBI offers long-term loans of up to five years online.

A number of other government startup loans and schemes for entrepreneurs in India have been introduced in the past few years. Here is a list of some of the most popular and notable government schemes that offer business loans for startups And MSMEs in India.

1. 42 (End to End Energy Efficiency) – Click to read more ➤
2. Bank Credit Facilitation Scheme – Click to read more ➤
3. Credit Guarantee Scheme (CGS) – Click to read more ➤
4. Credit Linked Capital Subsidy for Technology Upgrades – Click to read more ➤
5. Coir Udyami Yojana – Click to read more ➤
6. MSME Business Loans For Startups In 59 Minutes – Click to read more ➤
7. Pradhan Mantri Mudra Yojana (PMMY) – Click to read more ➤
8. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE) – Click to read more ➤
9. Standup India – Click to read more ➤
10. Sustainable Finance Scheme – Click to read more ➤

4E (End to End Energy Efficiency)

Launched in: September 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: MSME startups in the manufacturing or services sector that have been operating for at least three years and have earned cash profits in the last two years are eligible for the loan. Here are the specific eligibility criteria.

• The startup should not be in default with any bank/financial institutions
• It should have undergone a process of detailed energy audit (DEA) through a technical agency/consultant that is a Bureau of Energy Efficiency (BEE)-certified energy auditor
• The detailed project report (DPR) prepared by the technical agency/consultant should have been vetted by the Energy Efficiency Cell (EEC), SIDBI
• The unit should not have availed a performance linked grant under the World Bank-Global Environment Facility (WB-GEF) Project for the proposed energy efficiency (EE) Project and should be in compliance with the Environment and Social Management Framework

Overview: This MSME scheme for entrepreneurs has been launched jointly by India SME Technology Services Ltd (ISTSL) in association with World Bank. The main objective is to implement energy efficiency measures across Indian industries on an end-to-end basis. Also, it aims to help startups finance purchases of second-hand machinery/equipment.

The business loans for startups under this scheme meet part costs of:

• capital expenditure, including for the purchase of equipment/machinery, installation, civil works, commissioning, etc.
• any other related expenditure required by the unit provided it is not more than 50% of capital expenditure.

Fiscal incentives under the 4E scheme:

• The MSME startup has to pay only INR 30,000 and applicable taxes and the balance fee will be paid by SIDBI to auditors
• Up to 90% of the project cost with a minimum loan amount of INR 10 Lakh and a maximum loan amount not exceeding INR 150 Lakh per eligible borrower can be granted under this scheme.
• Eligible loan amount should not exceed one-fifth of the total turnover of the applicant unit.

Time period: The repayment period, including the initial moratorium period of up to six months, shall not be more than 36 months for loans up to INR 100 Lakh and 60 months for loans beyond INR 100 Lakh.

To know more about this startup scheme by the Indian government, click here.

Bank Credit Facilitation Scheme

Launched in: NA

Headed by: National Small Industries Corporation (NSIC)

Industry: Sector-agnostic

Eligibility: MSMEs registered in India

Overview: The scheme aims to meet the credit requirements of MSME units. The NSIC has entered into a MoU with various nationalised and private sector banks for the purpose. Through syndication with these banks, the NSIC arranges for credit support (fund- or non-fund-based limits) from banks without any cost to MSMEs.

Fiscal incentives: NA

Time period: The repayment period varies depending on the income generated from the startup and generally extends from five to seven years. However, in exceptional cases, it can go up to to 11 years.

To know more about this startup scheme by the Indian government, click here.

Credit Guarantee Scheme (CGS)

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector-agnostic

Eligibility: The scheme is applicable to new and existing MSMEs engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, self-help groups (SHGs), training institutions, etc.

Overview: The Credit Guarantee Scheme was launched by the government to strengthen the credit delivery system and to facilitate the flow of credit to the MSME sector. The lending institutions under this scheme mainly include public, private, and foreign banks, along with regional rural banks and the SBI and its associate banks.

Fiscal incentives: This MSME scheme for entrepreneurs comes with a number of benefits, including term loans and/or working capital loan facility up to INR 200 Lakh per borrowing unit. Here are some more details of the scheme:

• The guarantee cover provided is up to 75% of the credit facility up to INR 150 Lakh
• 85% of credit facility for loans up to INR 5 Lakh is provided to micro-enterprises
• 80% of credit facility for MSMEs owned/operated by women and all loans to NER including Sikkim
• For MSME Retail trade, the guarantee cover is 50% of the amount in default subject to a maximum of INR 50 Lakh.

Time period: The credit guarantee will commence from the date of payment of guarantee fee and will run through the agreed tenure of the term credit in case of term loans/composite loans and for a period of five years where working capital facilities alone are extended to borrowers, or for such period as may be specified by the guarantee trust.

To know more about this startup scheme by the Indian government, click here.

Credit Linked Capital Subsidy for Technology Upgrades

Headed by: Office of the Development Commissioner, Ministry of MSMEs

Industry: Sector-agnostic

Eligibility: Existing small-scale industry (SSI) startups registered with the State Directorate of Industries that have upgraded their existing plant and machinery with state-of-the-art technology, with or without expansion, are eligible for this scheme. Also, new SSI units registered with the State Directorate of Industries that use the appropriate, eligible, and proven technology, duly approved by the Governing and Technology Approval Board (GTAB)/Technical Sub­Committee (TSC), will be eligible.

Overview: This business loan for startups aims to facilitate technology upgrades by providing upfront capital subsidies to SSI units, including khadi, village, and coir industrial units, on institutional finance (credit) availed by them for modernisation of their production equipment (plant and machinery) and techniques.

Fiscal incentives: The ceiling on business loans for startups under the scheme has been raised from INR 40 Lakh to INR 1 Cr while the rate of subsidy has been enhanced from 12% to 15%. Here, the admissible capital subsidy is calculated with reference to the purchase price of plant and machinery, instead of the term loan disbursed to the beneficiary unit.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Coir Udyami Yojana

Headed by: Coir Board

Industry: Agriculture

Eligibility: All coir processing MSME startups registered with the Coir Board under the Coir Industry (Registration) Rules, 2008, are eligible for this scheme. Here is the criteria:

• Assistance under the scheme will be made available to individuals, companies, self-help groups, NGOs, institutions registered under the Societies Registration Act 1860, production co-operative societies, joint liability groups, and charitable trusts
• Startups that have already availed of a government subsidy under any other scheme of the Indian government or any state government for the same purpose are not eligible to claim a subsidy.

Overview: The scheme is aimed at supporting the establishment of coir units. Banks will finance capital expenditure in the form of a term loan to meet the working capital requirements in the form of cash credit. Projects can also be financed by the bank in the form of composite loans consisting of capex and working capital.

Fiscal incentives: Banks will support project cost of up to INR 10 Lakh plus one cycle of working capital, which shall not exceed 25% of the project cost. In addition:

• This should be exclusive of the INR 10 Lakh limit proposed.

• The amount of credit will be 55% of the total project cost after deducting 40% margin money (subsidy) and the owner’s contribution of 5% from beneficiaries.
• The subsidy will be computed excluding working capital component.

Time period: Rate of interest chargeable for the business loans for startups shall be at par with the base rate. Repayment schedule may not exceed seven years after an initial moratorium, as may be prescribed by the concerned bank/financial institution.

To know more about this startup scheme by the Indian Government, click here.

MSME Business Loans For Startups In 59 Minutes

Launched in: September 2018

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector Agnostic

Eligibility: For existing businesses: Borrower should be GST, IT compliant and must have six months bank statement facility. The business loan eligibility is determined by a company’s:

a. Income/ Revenue
b. Repayment capacity
c. Existing credit facilities
d. Any other factors as set by lenders (banks)

Overview: Prime Minister Narendra Modi described this initiative last year while unveiling the 12-point action plan for the MSME sector. The initiative aims at automation of various processes to loan appraisal in such a way that one gets an eligibility letter, in-principle approval in less than 60 minutes and chooses the bank that one may prefer to ease access to credit to smaller and micro enterprises.

Post the in-principle approval, the time taken for business loan disbursement depends on the information and documentation provided on the platform and to the banks. Generally, post the in-principle approval, the loan is expected to be sanction/disbursed in 7-8 working days.

Fiscal Incentives: The contactless business loans for startups are currently provided for value from INR 1 Lakhs Upto INR 1 Cr. The rate of interest starts from 8% onwards.

Time Period: NA

To know more about this startup scheme by the Indian government, click here.

Pradhan Mantri Mudra Yojana (PMMY)

Launched in: 2015

Headed by: Micro Units Development and Refinance Agency Ltd (MUDRA)

Industry: Sector-agnostic

Eligibility: Non–corporate small business segment (NCSB) comprising proprietorship/partnership firms in rural and urban areas can apply for the loan. Here are some examples of NCSBs:

• small manufacturing units
• service sector units
• shopkeepers
• fruits / vegetable vendors
• truck operators
• food-service units
• repair shops
• machine operators
• small industries
• artisans
• food processors and others

All kinds of manufacturing, trading and service sector activities can get a MUDRA loan.

Overview: MUDRA provides refinance support to banks/Micro Finance Institutions (MFIs) for lending to micro units that have loan requirements of up to INR 10 Lakh. According to recent media reports, in the financial year 2017-18, overall business loans worth INR 2.54 Lakh Cr were classified as Mudra loans, an increase of 41% from INR 1.80 Lakh Cr loans sanctioned in this category in the last financial year.

For 2018-19, a target of INR 3 Lakh Cr has been set. Interestingly, the non-performing assets (NPA) level under the PMMY was only 5.38% as on March 31, 2018 — almost half of the gross NPAs across all sectors in the country, which crossed 10% in fiscal 2017-18.

Fiscal incentives: MUDRA offers incentives through these interventions:

> Shishu: Loans upto INR 50,000

> Kishor: Loans above INR 50,000 and up to INR 5 Lakh

> Tarun: Loans above INR 5 Lakh and upto INR 10 Lakh

Generally, loans upto INR 10 Lakh issued by banks to MSMEs are given without collateral. Also, within these interventions, MUDRA ensures to meet the requirements of different sectors/business activities as well as business/entrepreneur segments.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)

Launched in: August 2015

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: New enterprises in manufacturing as well as the services sector can apply for this scheme. Existing enterprises undertaking expansion, modernisation, technology upgrades, or other projects for growing their business will also be covered.

Overview: The aim of this scheme is to provide soft loans, in the nature of quasi-equity, and term loans on relatively soft terms to MSMEs to meet the required debt-equity ratio for the establishment of new MSMEs and also to enable the growth for existing ones.

Fiscal incentives:

• For the general category, 10% of the project cost, subject to a maximum of INR 20 Lakh is provided as the loan amount
• 15% for the enterprises promoted by Scheduled Caste (SC) /Scheduled Tribe (ST) / Persons with Disabilities (PwD), and women, subject to a maximum of INR 30 Lakh
• Persons belonging to these categories must own a controlling stake (ie 51% or higher)

Time period: On expiry of three years from the date of the first disbursement, the outstanding soft loan, together with any dues thereon, shall be converted into a secured term loan and the entire loan shall carry an applicable rate of interest as per internal rating of the borrower. The repayment period is generally upto seven years, inclusive of the moratorium up to one-and-a-half years for the term loan and up to two years for a soft loan.

To know more about this startup scheme by the Indian government, click here.

Standup India

Launched in: April 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: Enterprises in trading, manufacturing, or services. In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by an SC/ST or woman entrepreneur. The borrower should not be in default with any bank or financial institution.

Overview: This scheme by the Indian government facilitates bank loans between INR 10 Lakh and INR 1 Cr to at least one SC or ST borrower and at least one woman borrower per bank branch, for setting up of a greenfield enterprise. So far, 3457 online business loans for startups have been sanctioned through the Standup India platform.

Fiscal incentives:

• It offers composite loans between INR 10 Lakh and INR 1 Cr to cover 75% of the project, inclusive of the term loan and working capital
• The stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost
• The rate of interest would be the lowest applicable rate of the bank for that category (rating category) not to exceed [base rate (MCLR) + 3%+ tenor premium]

Time period: This government business loan for startups is repayable in seven years with a maximum moratorium period of 18 months.

To know more about this startup scheme by the Indian government, click here.

Sustainable Finance Scheme

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Green energy, non-renewable energy, technology hardware, renewable energy

Eligibility: Renewable energy projects such as solar power plants, wind energy generators, mini hydel power projects, biomass gasifier power plants, etc, for captive/non-captive use (ie, power generated is sold/supplied to the grid/off-grid).

• Any kind of potential cleaner production (CP) investments including waste management
• Suitable assistance to original equipment manufacturers (OEMs) which manufacture energy efficient/cleaner production/green machinery/equipment
• Either the OEM should be an MSME or it should be supplying its products to a substantial number of MSMEs

Overview: The objective of this startup scheme by the government is to assist the entire value chain of energy efficiency (EE)/cleaner production (CP) and sustainable development projects which lead to significant improvements in EE/CP/sustainable development in the MSMEs and which are presently not covered under the existing sustainable financing lines of credits.

Fiscal Incentives: Suitable assistance by way of term loan/working capital to ESCOs implementing EE/CP/Renewable Energy project provided either the ESCO should be an MSME or the unit to which it is offering its services is an MSME. The rate of interest will be applicable on basis of credit rating of MSMEs.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Since the launch of the Startup India Action Plan and Standup India scheme in January 2016, and the setting up of the Funds of Funds worth INR 10K Cr, more than 50 government schemes for small businesses have been put in place to support early-stage startups in taking off.

These government loans for small-scale industries are a handful of the many initiatives taken by the Indian government to boost the ease of doing business in the country. India ranked 77th in 2018 on the World Bank matrix in ease of doing business.

The government has been working at a macro level to promote entrepreneurship and opening up international startup corridors between India and the world. To this end, the Department of Industrial Policy and Promotion (DIPP) also launched the State Startup Ranking framework, on the basis of which it ranked states on the startup ecosystems, with Gujarat emerging on top of the chart.

At the micro level, the government’s efforts to offer business loans to startups and MSMEs will certainly supplement its larger gameplan and enable more entrepreneurs to turn their ideas into businesses.

The post 10 Business Loans For Startups And MSMEs By The Indian Government appeared first on Inc42 Media.

After wrapping up a busy 2018 with The Ecosystem Summit in November, bringing together over 250 entrepreneurs, investors, and senior government officials, we at Inc42 are keeping the ball rolling with the Mixer to be held on 28th February.

The Inc42 Mixer has been bringing together entrepreneurs, investors and influencers since 2015.

At the time, when we were planning our first edition of the Mixer, we came up with a description of what it should be: “An insanely diverse set of passionate and creative people, a fun evening with an emphasis on bonding rather than networking, peer to peer learning and new relations!”

And this idea has grown over the last three years, pulling in an eclectic mix of people who are making a meaningful contribution to the Indian startup ecosystem. Be it Delhi or cities like Chennai, Inc42 Mixers have witnessed startup verse networking and building connects beneficial for their companies in an informal setup and where everyone can meet anyone without any appointments required

However, since all our events are invite-only, thus, you will have to qualify for attending it!

And this time, we at Inc42 have planned a fun-filled, evening with #Noagenda #NoJudgements and #NoPressure.

The Mixer will bring together Delhi’s over 100 guests comprising of:

• Startups
• Investors
• Incubators & Accelerators
• Ecosystem Enablers

Entrepreneurs who came for our January F.O.U.N.D.E.R.S. Meetup at the Inc42 headquarters rooftop know that we can throw a mean party. And this continues to be our motto. So come join us on February 28, we will be hosting 100 guests across the ecosystem in Delhi with one simple aim – to let loose and have fun!

Applications are now open with an entry fee of INR 1,999. To ensure you are one of the selected 100 attendees, so apply now!

Inc42 Events: What’s On The Table This Year?

We at Inc42  believe that the best way to cover the Indian startups is by creating a platform for the people who power it through their work and ideas. To celebrate their contributions and bring together the movers and shakers of the ecosystem we hold many events throughout the year.

Be it bringing together Indian investors & VCs via our VC Dinner or via bringing together or be it enabling peer to peer learning via The Dialogue and most importantly, our flagship conference — The Junction — an invite-only gathering of 300 key stakeholders of India’s technology and startup ecosystem, all lined up for the next 11 months!

So whether you are a first-time entrepreneur or a seasoned veteran, If you want to network with the startup ecosystem folks, we host some of the coolest networking happy hours, panel discussions, pitch sessions and mixers each month.

The post Inc42 Mixer Alert! A Chance To Network With The Best Of Delhi’s Startup Community appeared first on Inc42 Media.

“Everyone has an idea. But it’s really about executing the idea and attracting other people to help you work on the idea.” – Jack Dorsey, a renowned American tech-entrepreneur.

First comes an idea, then implementing it and finally building a startup is something fascinating to hear. But, it takes an enormous effort to turn ideas into actions and rocks into milestones. Similarly, for a startup in its early stages, it requires someone to guide them in the right direction. This is where accelerators and incubators have an important role to play — they offer the right guidance to not only help startups realise their potential but also help it connect with the potential investors and clients.

And startups know this. Nowadays entrepreneurs look beyond mentorship or networking opportunities that a typical accelerator or an incubator offers.

Over the years, the Indian startup ecosystem has witnessed the creation of incubators, accelerators and even venture studios who are unique in their approach while working with the startups. A few weeks back we wrote about Prototyze, a venture studio, which helps startups to stay worry-free from administrative and money raising activities, and further guiding them to build a market-fit product and introduce them to the market.

As part of Inc42’s ongoing series with Amazon Web Services (AWS) – Hidden Ecosystem Champions where we showcase some of the champions who are creating a major impact in the early-stage startup ecosystem of India, this time, we connected with one such enabler — Upekkha.

Based in Bengaluru, founded by Prasanna Krishnamoorthy, Shekar Nair, Thiyagarajan Maruthavanan Rajan, Uppekha is working with Indian SaaS-based startups and calls itself to be a ‘catalyst’ rather than an accelerator.

Apart from its sharp focus on SaaS-based startups, what sets Uppekha apart is their policy i.e. —

It does not get any equity in a startup unless the startup achieves a pre-decided revenue milestone by the end of its acceleration program.

How Uppekha Is Different?

A typical incubator supports a startup for a period of 1 to 5 years, whereas an accelerator mentors the startup for only 3 to 6 months and the hybrid program offers helps startups for about 3 months to 2 years. While most of the accelerators and incubators provide mentorship and funding to startups in exchange for some equity, while others charge a separate program fee.

What makes Upekkha different from other incubators and accelerators in the country is the agreement that they have with the startup where the startup share equities and revenue share only upon hitting a preset milestone (such as $1 Mn in annual recurring revenue by the end of the program).

While talking about principle differentiating factor of Upekkha, Krishnamoorthy said,

“When you remove the pedal of acceleration the momentum goes back to the old speed, but we as catalysts stay with startups till transformation happen.”

Upekkha has set up a two-year program – UpekkhaOne – that helps startups achieve product-market fit efficiently, thereafter, design the growth to scale organically or find a strategic partner for inorganic growth.

• The focus of the program is progress in a real business metric such as revenue, gross margin, ownership and building moats.
• This ensures that the founder is equipped to make the right choices for scale capital-led growth.

The first cohort of startups under the Upekkha programme have reached their first million under 18 months, which demonstrates that intervention through frameworks, follow-up rigour, community and peer learning from other SaaS founders is working.

Growth Pains: The Challenge Of SaaS Startups

In sectors like SaaS, drawing the first cheque and making revenue out of the business model is not that difficult, but drawing the second cheque and emerging as a sustainable business is where most startups falter.

To give a better idea of the economics of the SaaS business consider this — to scale up the monthly recurring revenue of $8K to $80K means that the startup needs to increase revenue by about a million dollars.

“The mortality rate of startups is the highest in the $100K to $1 Mn annual revenue phase. That is where I wanted to help,” Krishnamoorthy said.

Observing the industry scenario for more than ten years while working with various startups and lastly as CTO at Microsoft Ventures Accelerator, Krishnamoorthy understood the pain of entrepreneurs and the loopholes. He realised that startups especially B2B-SaaS is like running a marathon and the three months sprint of acceleration simply isn’t enough.

That is when Krishnamoorthy quit Microsoft to launch Upekkha in January 2017. Soon, he roped in his colleagues Nair and Rajan.

Targeting Value Over Efficiency

“The Entire B2B products industry in India put together is no greater than a single Silicon Valley B2B company — Splunk.”  Nair said. Splunk is an American multinational software company with annual revenue of $1.6 Bn and has acquired eight companies.

But, why? According to Rajan, “Business in SaaS done from India lends itself to capital efficiency. If they don’t get lured by massive capital then they can build a value SaaS business.”

To this point, experts say that startups in India have a unique advantage in doing business when they adopt the SaaS business model. This is a key reason why Upekkha only works with B2B SaaS startups and removes the urgency for a miracle to make the startups successful.

“After all every startup needs at least three to four miracles to happen for them to succeed,” Nair said.

Jimit Bagadiya, cofounder and CEO SocialPilot, one of Uppekha’s accelerated startups says, “Upekkha focuses only on SaaS startups which ensures that all sessions are 100% relevant and relatable. The tactical sessions gave us many actionable ideas that we are already implementing.” According to Bagadiya, being part of Upekka help them raise their revenue by $3K — “literally overnight”.

Complimenting to this, Vivek Khandelwal, founder of iZootoo (a marketing automation startup), added, “We have been part of the UpekkhaTribe for over 16 months now while our team has grown by 1.5X, revenues by 5X.”

Scouting For Next Level For India’s SaaS Growth

Considering that SaaS software giants such as Microsoft, Oracle and SAP have been around for decades, startups in this segment need a longer cycle of nurturing and development to create world-class products. As an accelerator mentors a startup for only 3 to 6 months, a hybrid program allows SaaS startups to hone their product as well as meet like-minded people.

On the flipside a major benefit for subscription-based software companies is that their products yield a constant revenue, removing the headache of worrying about a working monetization plan. With catalysts such as Upekkha helping in the early stages of operation, it becomes much easier for SaaS startups to reach the milestone revenue target and achieve the next level of growth.

The constant revenue model makes the opportunities in this sector huge. Though, currently, India just has three unicorns in this segment i.e. InMobi, Zoho, and Freshworks, but, if we look at the recent trends and investor sentiments, it’s expected that enterprise tech as a segment is ready for next level of growth. According to Inc42 DataLabs estimates, of the 31 soonicorns which have the potential to turn unicorns by 2020, 10% of them are enterprise tech — showcasing the increased investor interest in the segment.

With catalysts such as Upekkha hitting the right chords by helping the startups build value SaaS businesses, the scope for the sector to grow further looks much more promising.

The post Why Indian Startup Ecosystem Needs More Catalysts Like Upekkha Than Typical Incubators And Accelerators? appeared first on Inc42 Media.

Bengaluru-based ride-hailing company, Ola has finally confirmed investment from Flipkart cofounder Sachin Bansal. In a statement released today, Ola announced that Sachin has led an investment of $92 Mn (INR 650 Cr.) in the company.

Bhavish Aggarwal, cofounder and CEO, Ola said, “We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled. His investment is a huge encouragement for all of us at Ola and our mission to serve a billion people.”

The investment, which is part of Ola’s ongoing Series J funding round, is the largest investment by an individual in Ola till date. Cofounded by Bhavish Aggarwal and Ankit Bhati in 2011, Ola is currently looking to raise capital from sources other than SoftBank, its largest institutional stake holder, to prevent the Japanese conglomerate from taking over the ride hailing company.

Earlier in January, a Ministry of Corporate Affairs filing showed that Bansal had made an investment of $21 Mn in the company. At the time company sources had told Inc42 that the investment would be part of a larger $91 Mn funding by the Flipkart cofounder.

After Sachin Bansal’s investment, total funding in Ola’s ongoing Series J round has now risen to about $166 Mn. The company had earlier raised $74 Mn (INR 520 Cr) from its existing investor, a Hong Kong-and London-based hedge fund, Steadview Capital, through preference shares at a subscription price of $301 (INR 21,250) per preference share, according to a company filing accessed by Inc42.

Commenting on the investment, Sachin Bansal, said, “Ola is one of India’s most promising consumer businesses. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today.

The Ola funding represents his most prominent and largest investment to date, and his first major deal since he left Flipkart following its sale to Walmart for $16 billion last year.

Sachin Bansal left Flipkart $1 Bn (INR 6,955 Cr) richer. He has recently acquired two residential properties worth $6.39 Mn (INR 45 Cr) in Bengaluru. Bansal  also recently started a new venture, BAC Acquisitions Pvt Ltd along with a friend and former investment banker Ankit Agarwal. Further, there is speculation about Bansal investing $50–100 Mn (INR 347 Cr- 695 Cr) in an electric vehicle startup Ather Energy.

Meanwhile Ola has been busy expanding globally in the last one year. In 2018 the company launched its operations in Australia, UK, and New Zealand. The company also reportedly set up teams in Dhaka, Bangladesh and Colombo, Sri Lanka.

The post Sachin Bansal Invests $92 Mn In Ola appeared first on Inc42 Media.

“Never dream of becoming something, if you dream, dream of doing something.”

These words from Prime Minister Narendra Modi have been the foundation for India’s ambitious startup campaign — Startup India, Standup India.

Aimed to make India, one of the largest and vigorous startup ecosystems in the world, PM Modi’s flagship initiative Startup India programme took a slew of policy initiatives to build a strong, conducive, growth-oriented environment for Indian startups and thereby help generate lakhs of job opportunities in the country.

Launched on January 16, 2016, the initiative marked its three-year anniversary last week.

The 19-point Startup India Action Plan envisaged several incubation centres, easier patent filing, tax exemptions, ease of setting-up of business, an INR 10,000 Cr ($1.45 Bn) corpus fund, and a faster exit mechanism, among other things.

And if we look back, it has been a phenomenal growth story so far, especially for a country that was ranked below 100 by the UN Ease of Doing Business Index and had only four states with definitive startup policies three years ago.

Despite all the existing gaps and ongoing challenges such as data protection, angel tax, pending policy approvals and more, today, India has climbed up to the 77th position in UN’s Ease of Doing Business Ranking. It has also been attracting globally-acclaimed investors, multinationals leveraging Indian tech startups to supplement their technology, and is home to more than 39K startups, according to Inc42’s The State of Indian Startup Ecosystem 2018 Report.

Not convinced! Let’s have a look at a few numbers!

• Between 2016-2019, 15,113 startups were recognised under the Startup India programme across 492 districts in 29 states and six Union territories
• 55% of the recognised startups are from Tier 1 cities, 27% from Tier 2 cities, and 18% are from Tier 3 cities
• 13,176 recognised startups have reportedly created 1,48,897 jobs with an average of 11 employees per startup
• 45% recognised startups have at least one or more women directors
• 24 Indian states have introduced a startup policy
• The government made 22 regulatory amendments and approved 1,275 patent rebates in the last three years
• More than 288.16K registered users are there on the Startup India hub
• Startup India Hub has addressed 121.83K queries and facilitated 673 startups
• More than 233.27K have registered under the Startup India learning programme

(Source: Startup India)

Here’s a glimpse of Startup India’s journey so far:

Startup India: Enabling A Conducive Ecosystem Beyond ‘Jugaad’

The Startup India Action Plan intended to build a strong support ecosystem that is conducive for the growth of startups and supports the spirit of entrepreneurship in the country. It emphasised on self-compliance, which made the team working at the Startup India Hub a key stakeholder in the ecosystem to work in a hub-and-spoke model and collaborate with various enablers.

With the introduction of the Fund of Funds worth INR 10,000 Cr, the Indian government took the first step in making startups a viable means of livelihood and not just ‘jugaad’ (a Hindi word meaning an improvised or impromptu solution to something). Also, it made the youth of the country look at entrepreneurship as a viable career option.

At the same time, government think tank NITI Aayog launched the Atal Innovation Mission to foster innovation among budding entrepreneurs at the grassroots level. As part of this, 5,441 Atal Tinkering Labs have been set up across the country. In the Union Budget for 2018, the government also allocated $480 Mn (INR 3414.19 Cr) for new-age technologies to further support innovation in the Indian startup ecosystem.

Under the Startup India programmed, startups were defined and redefined. For instance, the startups’ age was also increased from 5 to 7 years (10 in the case of biotech). The government has taken various initiatives to boost the growing startup culture in the country such as fast-tracking of startup patent applications, income tax exemption, and self-certification. It also launched the Startup India Hub to bridge the gap between various stakeholders of the startup ecosystem.

And if that’s not enough, the buzz generated by the programme helped open up a lot of opportunities for startups. Take funding, for instance — according to Inc42 DataLabs, between 2016 and 2018, over $30.3 Bn was invested in Indian startups across 2,550 deals. Also, VC investments saw a moderate rise despite an overall fall in funding in 2018, which indicates a positive sentiment among the investors in the near term.

Startup India: Impact On Individual States

In the past few years, several states have taken the onus to build their own incubators, coworking hubs, etc, to boost the innovation in the state. Earlier, defence minister Nirmala Sitharaman had asked local MPs to set up coworking spaces in their constituencies.

Recently, Rajasthan launched Bhamashah Techno Hub, one of the largest incubators in the country, and Kerala launched one of the biggest coworking spaces in India. Karnataka announced a credit line of INR 2,000 Cr ($281 Mn) for the startup ecosystem in the state, with an aim to have at least 20,000 startups by 2020.

Telangana, Andhra Pradesh, Odisha, Madhya Pradesh, and Gujarat are some other states that offer end-to-end support to startups and have come up great initiatives to boost their respective ecosystems.

DIPP’s State Startup Ranking Framework: The Game Changer

At the core of the Startup India programme are the state startup policies, which the states have started to take seriously under the overview and guidance of Department of Industrial Policy and Promotion (DIPP) and the Centre.

Before Startup India was launched, just four states had their startup policies in place and today, 24 Indian states have introduced their own policies.

The DIPP recently released the State Startup Rankings on the basis of the Startup Policy Framework for 2018 under which Gujarat was rated the ‘Best-performing state’, while Karnataka, Rajasthan, Odisha, and Kerala took the title of the ‘Top-performing states.’

One of the interesting aspects of these rankings was the DIPP’s effort to highlight the strength and weaknesses of each state in a separate state report, in which they highlighted the steps forward for the state to perform better.

Policy Changes Making Slow Progress

Inc42 in its annual year-end series ‘2018 in Review’, noted that the pace of policy formulation has been slow in the country. While some of these policies, like Drone Regulations 1.0, are already in effect, others have been drafted, are being redrafted, or are pending approval. The list includes:

• Personal Data Protection Bill
• Ecommerce Policy
• Epharma policy
• Electric Vehicles Policy, FAME II Extension
• National Electronics Policy
• Draft PSS Amendment Bill and more

On one hand, the lack of policies in these sectors such as epharma and electric vehicles (infrastructural) has been keeping many investors away and on the other, angel tax is a big issue for the startup ecosystem.

The Startup India programme has, in fact, been facing a serious threat because of the angel tax issue and angel investments have been declining in the last two years. Recently, the DIPP issued a notification easing the angel tax exemption process. However, the notification has limited appeal. It neither caters to the concerns of all the startups facing angel tax issues nor addresses the core concern — the DCF (discounted cash flow) valuation method.

Further, this existing angel tax exemption mechanism is applicable only to those DIPP-recognised startups whose aggregate amount of paid-up share capital and share premium after the proposed issue of share does not exceed INR 10 Cr ($1.4 Mn).

Additionally, the approval mechanism will also be applicable to startups incorporated before April 2016. Initially, the exemption was restricted to a maximum 3-years for startups.

Startups that were born before 2012 and those that have received assessment orders have already been excluded from the exemption mechanism.

Is Indian Startup Ecosystem Gunning For The Number 1 Slot?

Overall, Startup India has provided a major push to the country’s entrepreneurial and innovative spirit. According to Inc42’s State Of The Tech Startup Ecosystem Report 2018, India now has 26 unicorns and more than 31 soonicorns. Overall, startups have created a value of $130 Bn.

With global investors such as Sequoia Capital, SoftBank, Tencent, and Alibaba bullish on the Indian tech and consumer internet segment, we are also seeing startups come up in core manufacturing to leverage the Make In India campaign. Just last year, India surpassed Vietnam and gained the second position in the mobile manufacturing segment.

Also, the Indian government’s attempts to build exchange programmes with foreign startups in countries like Germany and SAARC nations has opened new doors of opportunities for the stakeholders in the startup ecosystem.

The formation of international startup corridors with countries like Japan, the US, the UK, Israel, and Portugal, among others, will certainly boost the startup and cross-border investor sentiment as well.

Even as the Modi government enters the last phase of its current term, there are a plethora of issues such as pending policies, angel taxation, infrastructural and bureaucratic hurdles that startups still have to face and need to be resolved at the earliest.

According to a survey of 15K startups, only 18% of the respondents said they actually benefited from the Startup India scheme. Only 163 startups had benefited from the Fund of Funds in the last three years till December 31, 2018, and the fund allocation and distribution is coming down further. This poses a question over the efficacy and cost-effectiveness of the scheme.

The government needs to address each of these concerns before we can even think of an ecosystem like that of Israel or Silicon Valley.

Gender parity is still an issue in the startup ecosystem and the revelations of #MeToo left the Indian startup ecosystem disturbed.

But amid the good and the bad, the Indian startup ecosystem continues to grow manifold and carve out an ever-expanding niche for itself in the global ecosystem.

The article has been co-written by Bhumika Khatri and Suprita Anupam.

The post How Successful Is PM Modi’s Startup India Programme? Here’s The Numberspeak appeared first on Inc42 Media.

Masayoshi Son-led SoftBank has received the final approval from Competition Commission of India (CCI) to pick up a major stake in ecommerce logistics startup Delhivery.

CCI said that it has approved “acquisition of 22.44% of the total share capital of Delhivery Pvt. Ltd. (on a fully diluted basis) by SVF Doorbell (Cayman) Ltd.”

The CCI has also approved the acquisition of preference shares in Delhivery by CA Swift Investments. Mauritius-based CA Swift Investments is the special purpose vehicle of Carlyle Group.

In January, SoftBank had sought approval from the Competition Commission of India (CCI) to acquire a 37.87% stake in Delhivery Pvt Ltd. It was looking to invest $450 Mn in the Delhivery, thereby making SoftBank, the largest shareholder in the company.

According to SoftBank’s filing with the CCI, the proposed stake buy involves two steps:

• Subscription to 22.44% of the total share capital of Delhivery by SoftBank Vision Fund
• On completion of Step 1, a potential subsequent acquisition of shares at a price and on such terms to be agreed up to 37.87% stake in the Indian startup.

Apart from SoftBank and Carlyle Group Delhivery’s investors include China’s Fosun International, New York-based investment firm Tiger Global, Nexus Venture Partners and Times Internet, the digital arm of the Times of India Group.

Delhivery was founded in 2011 by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati, and Suraj Saharan. It services about 600 cities and 8,500 pin codes in India.

As of December 2018, the company had 12 fulfilment centres for B2C and B2B services and works with ecommerce companies such as Flipkart and Paytm.

In FY18, the company reported a jump of 42% in its revenue gaining total revenue of $153.26 Mn (INR 1,073.64 Cr). Here, its operational revenue contributed almost 95% to its total revenue as against $107.92 Mn (INR 756 Cr) for the previous year.

Like PolicyBazaar, another SoftBank portfolio company, Delhivery has also been cotemplating an IPO for a while now. However with the latest infusion of funds, Delhivery is set to stay private for longer

The post SoftBank Gets CCI Approval To Pick Up 22.44% Stake In Delhivery appeared first on Inc42 Media.

“There Is One Thing Stronger Than All The Armies In The World, And That Is An Idea Whose Time Has Come.”– Victor Hugo, French poet, novelist, and dramatist

If one has an idea, a roadmap, and an option that can create an impact in the overall industry, then there are investors, incubators and accelerators to help this aspiring entrepreneur.

One such person with an interesting back story is Gurinder Singh Sahota, founder of Silky Cup.

In 2013, Sahota came across a news article about 42 school-going girls who had to use old socks, ash, and sawdust during their menstrual cycle in a in village near Amritsar due to non-availability of affordable sanitary napkins. This increased their chances of vaginal infections and ultimately severely affect their health.

Touched by the situation Sahota dug further into this mass problem. The research led him to develop an environment-friendly and reusable menstrual cup that allows one to even exercise while in-use, and can be comfortably worn for the course of the entire day. Sahota soon started a company called Silky Cup and listed his products on popular ecommerce platforms such as Amazon and Flipkart.

Sahota aims to get this product delivered to millions of people residing in smaller cities and rural areas, where menstruation is still a “taboo”. In only a short span of three years, Silky Cup has sold over 90,000 units across India.

Since an idea is not enough, how did all this happen?

For Silky Cup, achieving these numbers wouldn’t be an easy job if it was to pursue its journey alone. While the growth for the initial years was steady, the company touched new heights after October 2018 when it became part of Huddle and HealthStart. Sahota says, “During this incubation period, from October 2018 till present, we have witnessed a steady increase in sales, secured seed funding, tapped more geographies and will soon become an omnichannel brand having a presence in all the major pharmacies in Delhi NCR.”

According to Sahota, HealthStart has provided it industry expertise, whereas Huddle has supported the startup with its core team, extensive network and synergies with its other portfolio companies — which worked in its favour. “A good incubator should provide 360-degree support to startups. In addition, a strong network and access to industry experts act as a good catalyst for a startup’s growth,” Sahota says.

Silky Cup is one of the many startups that are benefiting from the guidance and the support of incubators and accelerators in India.

As part of the Inc42 and Amazon Web Services (AWS) ongoing series, Hidden Ecosystem Champions, where we cover the champions who are creating an impact in the early-stage startup ecosystem of India. This time, we would like to turn the spotlight on some of the incubators such as Huddle, Indigram Labs Foundations, Esselerator and UIncept, that are helping early-stage startups with the right recipe to build sustainable businesses.

Bridging The Gap Between The Idea And Execution

“Sometimes it’s good to fail fast. The biggest gap is not being able to cope with the intensity of failure,” Sanil Sachar, founder, Huddle.

He further added that mentorship plays an important role in paving the pavement for startups to grow into an organisation.

Echoing this point, founder and chief mentor at UIncept (formerly UDGAM), Manish Gupta says, “If you see the startups coming out of incubators or accelerators, you will find the ratio of failure to be substantially low.”

According to experts, the main reason behind this is the selection process adopted by the programmes, also because of the support startups find when they sign up for these cohorts. But still, the number of failures exists, as startups focus more on funding rather than sustainability, which is a major reason for failure, Gupta said.

Adding a different perspective to the discussion, Ashish Khetan, chief mentor and investment officer at Indigram Labs Foundation, says that although private players are bringing in positive results, but in terms of numbers, incubators are quite high, but they reside in purely educational institutes such as Indian Institute of Technology and Indian Institute of Management. And, the primary motive of IITs or IIMs is to create good quality engineers or management graduates respectively, and not entrepreneurs.

Khetan adds, “Clearly, there is a dichotomy, where the focus is more towards education and less on entrepreneurship. But as the ecosystem is evolving, a lot of people are jumping straight away from education to entrepreneurship rather than looking for a corporate job and working for a couple of years.”

Entrepreneurship skills are necessary unless the market is oversaturated or one has a solution like Mark Zuckerberg. Even Bhavish Aggarwal, the founder of Ola, worked at Microsoft Research in Bengaluru for two years before exploring his entrepreneurial journey. But with the growth of the overall startup ecosystem in India and increased education and focus given to startups in the mainstream, India is will see the rise of more entrepreneurs like Ritesh Agarwal, founder of OYO, who started with only a bagful of passion.

Creating An Impact

While working with the startups, especially in the seed-stage and some even in the idea stage, incubators know the plans and pains of the startup founders. For instance, with a pool of 25-30 mentors in the team, UIncept works with idea-stage startups or startups with minimum viable products (MVPs). To ensure better mentorship, UIncept typically incubates 6-10 startups in each batch.

Even though all these firms fall into the same segment of incubators, the approach is different for each of them. For example, instead of focussing on the typical classroom sessions, Huddle follows the idea of one-on-one mentee engagement, in order to strengthen the affiliation and support the incubatee gets for their venture.

As soon as a startup is shortlisted, the incubator assigns a dedicated mentor from its team of 30 members which includes experts like Bhaskar Pramanik (former chairman, Microsoft India), Gautham Mukkavilli (former India Beverages CEO, PepsiCo) among others. The cofounder of Huddle, Ishaan Khosla adds, “This is necessary as each startup grows at a different pace and has unique needs to grow. And, this has enabled us to grow a promising and wide portfolio across sectors, and seven cities in India.”

Similarly, Indigram Labs too follows the one-to-one incubation model. But the unique part about the incubator is that it has a monthly theme-based program and an Indigram portfolio startup gets to experience a new theme every month, opening new windows for learning filled with excitement. For example, if a startup is working in agritech sector, Indigram offers a program for cleantech for a month and fundraising verticals in the next month to help the startup broaden its horizons. It follows a criterion where a startup is judged on various parameters including innovation, team size and quality and sustainability among many others.

On the other hand, Esselerator, an initiative by the Essel Group, offers the wide network of Zee Media and other subsidiary branches to the startup. The uniqueness about Esselerator is that it enables a startup to explore real-life problems and addressing them along with its own team of experts. This is what makes the startup get more real-world experience rather than just academic experience.

But the question is why are these incubators majorly focussing at the grassroots level?

To answer this question, Sachar said that the ratio of startups that are either created or creating a major impact are actually based out of Tier 2 or Tier 3 cities. And, in those areas, the trend is built more towards creating a solution that is catering to a need rather than a desire.

“However, not all need base businesses are impact driven and are building solutions to complement other products rather than create their own task to find a market. This brings me to the big wave of B2B businesses that are arising in the country,” added Sachar.

All these incubators started with an aim to bring in entrepreneurs, experts and industry leaders under the same roof to create something massive, which always begins at the grassroots level.

How Does The Future Look Like?

A startup cannot be successful in a day. To build the Paytms and Freshworks of tomorrow, the ecosystem needs more incubators that work at the ground level, right from the early-stage. For instance, Gupta of UIncept said, “Being the chairman of JIMS Group of Institutions, I already had the resources and network to support and guide younger entrepreneurs. So I took it upon myself to create an ecosystem which can support these individuals in early stages of their entrepreneurship journey, and possibly help create future unicorns.”

But what about failures?

“As long as we have a fail fast and keep going approach, we are in a good position. The stigma of failing needs to be removed and instead we need to realise that startups are bound to fail. The intensity of failure is directly proportionate to how the team copes with it,” Huddle founder said.

With more than 250 incubators and accelerators in India, the country is now one of the largest startup hubs in the world. And, with currently operating 39K startups in the nation, the day is not far when the world will see more successful startups like Flipkart, Ola, OYO and Swiggy coming out of India’s startup ecosystem.

For most of the incubators, the main reason behind this enormous growth has been the startup ecosystems which were majorly concentrated in metropolitan cities like Delhi, Bengaluru, Mumbai, until a couple of years back. Now, the times have changed, and even smaller cities like Pune, Lucknow, Jaipur and Hyderabad too have seen the rise of support systems, essential for fostering the startups mushrooming in the mid-tier cities of India.

The post The Catalysts Turning Innovative Ideas Into Successful Startup Stories appeared first on Inc42 Media.

With a steady eye on the upcoming General Election 2019, the Interim Budget of the BJP government for 2019 will likely be strong on optics and populist measures. In the absence of Union finance minister Arun Jaitley, who unexpectedly left for the US for medical reasons, the Budget will be presented by interim finance minister Piyush Goyal.

Considering that the outgoing Modi government has launched more than 150 schemes and policies — all of which were personally flagged off by Prime Minister Narendra Modi —  everyone’s interest has been piqued, despite this Budget being a vote-on-account one.

As appears from President Ram Nath Kovind’s address to the Parliament while opening the Budget Session, healthcare and agriculture will be the focus areas for Goyal. Among the government’s flagship schemes, Ayushman Bharat, MUDRA, Startup India, Digital India, and Skill India are expected to get a fair share of budgetary allocation.

Besides, the startup ecosystem fraternity expects Goyal to address numerous policy-related issues which have been acting as a roadblock for startups and investors. In Inc42’s Budget Survey 2019, 25% of startups and investors chose the angel tax issue as the biggest problem that needs to be resolved.

Other key expectations of startups from Union Budget 2019 can be summarised under the following themes:

• Need a policy thrust to increase digital transactions
• Address the issue of ‘ease of shutting down’
• Tax holiday for government-registered startups from 3 to 5 years
• More clarity on disbursal of Fund of Funds
• Clarity on tax on ESOPs

Inc42, spoke to dozens of startups, investors, and industry experts to understand and voice their demands for their respective sectors. Here’s what they have to say:

• Fintech Startups Demand Tax Rebate, Liquidity And Policy Reforms
• Edtech Startups Demand GST Be Cut From 18% To 5%, Reskill India And More
• Healthtech, Epharma Startups Demand A New Medical Innovation Fund
• EV Startups Demand Reduction In Import Duty, GST And Better Charging Infrastructure
• E-commerce Retail Logistics: What The Ecosystem Expects From Budget 2019
• Inc42’s Budget Survey 2019: Angel Tax Exemption, Fund of Funds Implementation Top Priority

Now that you know what matters to the Indian startup ecosystem, scroll down to read today’s Union Budget live updates and its impact on the startup ecosystem.

Union Budget Highlights

A Special Mention To India’s Booming Startup Ecosystem By The FM

Piyush Goyal: India has become 2nd largest hub of startups.

Inc42 Take: According to NASSCOM, India is the third-largest startup hub based on the number of startups, while Israel is looking to compete with the country and claim the third position. Interestingly, the annual funding report by Inc42 DataLabs showed that India has been witnessing a decline in funding deals and amount. Currently, India stands at the 57th position in the Global Innovation Index out of 130 countries.

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12:25 PM

More Power To MUDRA Loans But Has It Missed The Mark?

Piyush Goyal: Allocation for Mudra loans kept at INR 4 Lakh Crore. More than 70% of MUDRA yojana beneficiaries are women.

Inc42 Take: While no official or unofficial data exists to prove it, an analysis by India Today claimed that only 3% Mudra loans can generate a monthly income of more than INR 10,000. Further, the analysis showcased that 40% of the Mudra funds are not being put to use. Former RBI governor Raghuram Rajan had once mentioned that collateral-free loans such as Mudra are more prone to turning into non-performing assets (NPAs).

Mudra stands for ‘Micro Units Development and Refinance Agency Bank. It provides loans at low rates to micro-finance institutions and NBFCs, which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.

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12:20 PM

Will Put An Indian In Space By 2022, Says Goyal

Piyush Goyal: India to be the launchpad in the world with Gangayaan Mission with an aim to place Indian astronaut in space by 2022.

Inc42 Take: Currently, space tech startups are struggling to get funding. Also, following recent reports on ISRO cancelling the contract of Team Indus as of Jan 19, 2019, this step by the central government may bring some hope for the sector.

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12:15 PM

More Talk About EVs But No Action

Piyush Goyal: India will lead the world in transport with EV and renewable energy, making India a pollution free nation.

Inc42 Take: The timeline is still quite uncertain as no concrete initiatives, regulations, and frameworks are in place, other than the government’s much-delayed FAME Scheme — Faster Adoption and Manufacture of (Hybrid and Electric Vehicles). With pollution and worsening air quality levels at urban centres being a core issue in cities such as Delhi, a call for more clarity in such initiatives of government is long overdue.

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12:13 PM

A Welcome Move: More GST Reforms For Businesses

Piyush Goyal: Businesses with less than INR 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to file return quarterly returns.

Inc42 Take: This is a welcome move for small-sized companies as they will be able to pay income tax at quarterly intervals. This will help to ease the cash flow of the companies.

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12:11 PM

A Wider Tax Base?

Piyush Goyal: More than 1 Cr people filed income tax for the first time after demonetisation.

Inc42 Take: India’s tax-GDP ratio is still abysmally low. This is largely due to the low direct tax base and India having a huge unorganised sector. While the demonetisation brought the unbooked income to light and led to increased annual income tax turnover, small and micro enterprises with borrowings of under INR 1 Mn are yet to fully recover from the move. This initiative has, however, upped the ‘formalisation’ of the economy, which is seen as an increase in ‘new to credit’ MSMEs at 4 Lakh units in the second half of 2017, as compared to over 2.7 Lakh a yeara go.

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12:01 PM

On Easing Income Tax Compliance

Piyush Goyal: All income tax returns to be processed within 24 hours and refunds to be issued simultaneously. Tax scrutiny will also now be done electronically and there will be no interaction between the tax authority and the taxpayer. Also, businesses with less than INR 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.

Inc42 Take: This is good news for small companies. Instead of making a bulk income tax payment, they will now be able to do it quarterly, helping ease the cash flow of the company.

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11.58 AM

Good News For Entertainment Startups

Piyush Goyal: The entertainment industry will be a major employment driver of jobs and income. Single window clearance for movie shooting now available to all Indians as well, which was earlier was only limited for foreigners.

Inc42 Take:  Startups in the entertainment industry had been restricting themselves to producing viral video content. However, this initiative may provide a huge impetus to the production houses and innovative streaming services.

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11.56 AM

1 Lakh Digital Villages In The Next 5 Years?

Piyush Goyal: Our government hopes to create 1 Lakh digital villages in the next 5 years. Jan Dhan, Aadhaar mobile, and direct benefit transfer have been game changers. Aadhaar is now near-universally implemented and has helped ensure the poor get the benefit of government schemes directly in their bank accounts.

Inc42 Take: With the increase in smartphone and internet reach, schemes such as Jan Dhan, Aadhaar mobile, and direct benefit transfer have been game changers in the last four years. Post months of discussions on the validity of Aadhaar, it is now near-universally implemented and has really helped ensure the poor get the benefit of government schemes directly in their bank accounts.

The cost of data and voice calls in India is now possibly the lowest in the world; mobile and mobile part manufacturing companies have increased from 2 to 268.

With the government’s target to build 1 lakh digital villages in the next 5 years, we hope to witness increased financial inclusion in rural India. Also, this will increase the reach of urban startups to the currently untapped rural segment in perhaps all areas but particularly in digital payments and ecommerce.

Also, with deep-pocketed companies like eBay, Amazon India, Walmart, Reliance Retail, Future Retail entering both these segments and the rise of UPI, this can be a game-changer for Indian startups in the vernacular segment as well.

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11:51 AM

Goyal Boasts About India’s Climate Change Efforts, But Ground Reality Is Different

Piyush Goyal: India provided leadership to the global climate change effort. Our commitment to promote renewable energy is reflected in our initiative to set up the International Solar Alliance. Our installed solar generation capacity has increased 10 times in the last five years; lakhs of new jobs being created by the sector.

Inc42 Take: In line with the UN Paris Climate Change Summit 2015, India has taken a number of initiatives towards the adoption of cleantech and electric mobility. These initiatives have even been applauded at various international forums.

Considering 9 out of 10 of the most polluted cities in the world are in India, EV production and infrastructure development is the need-of-the-hour.

However, typical of the Indian government’s policy flip-flops and avoidance, no policy has been formulated so far to meet the electric mobility mission. The National Electric Mobility Mission Plan (NEMMP) aimed to have 6-7 Mn EVs by 2020, but we’re nowhere close to the target even 8 years later. Instead, we saw an announcement by the minister that India is targeting going 30% electric by 2030.

According to the FAME India Scheme, the total number of electric vehicles sold in India still stands at 2,64,953, with a yearly production of around 22K per year. In contrast, China sells over 870K EVs per year, accounting for 35% of the world market supply.

While there is no EV action plan or policy implemented yet, the government has simply extended the FAME subsidy scheme on an ad hoc basis till March 31. This, on its own, won’t encourage manufacturers to invest in EVs, which demand huge investments.

However, with conglomerates like SoftBank investing in India’s renewable energy sector, India is making substantial progress in the renewable energy sector. The installed solar generation capacity in the country has increased 10X in the last five years. Also, a number of schemes have been rolled out by the government to boost the renewable energy sector.

A lot more needs to be done. There lie skill and infrastructure gaps which the government needs to address. According to reports, India will be unable to meet its commitment to generate 175 GW energy by 2022 as the sector is plagued by policy inconsistencies and discom problems. India is aiming for a 40GW (40,000 MW) capacity solar rooftop by 2022 but has been able to install only 1334 MW grid-connected solar rooftops till November 2018.

Indian startups can certainly play a crucial role here with their innovative ideas, social impact, and reach out to untapped segments. With government’s inclination towards the sector, increased investor interest is also expected in the near term.

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11:48 AM

In Good News For Defence Startups, Goyal Commits Additional Funds For Defence

Piyush Goyal: We had promised to implement ‘One Rank One Pension’. We have already disbursed over INR 35,000 cr after implementing the scheme in true spirit. For securing our borders, govt increases defence budget to over INR 3 lakh crore. Will provide additional funds for defence if needed.

Inc42 Take:  There is good news for the ailing defence sector — the budget has been enhanced to over INR 3 lakh cr. The Modi government, to its credit, has brought startups into the defence space over the last few years. With a view to leverage defence-related startups and strengthen their collaboration with the defence forces — the Indian Army, Navy, and the Air Force — the government had launched the Defence India Startup Challenge on August 4, 2018.

A joint initiative of the Atal Innovation Mission, the Department of Industrial Policy and Promotion (DIPP), and the Defence Innovation Organisation (a ministry of defence initiative), the Defence India Startup Challenge aimed for startups to innovate defence solutions in 11 categories.

Along with the challenge, the defence minister also launched a number of initiatives to support startups working in defence and increase their engagement with the Indian forces. The overall objective was making India self-reliant when it comes to meeting its national defence requirements.

If the government is ready to back the scheme with more funding, it is definitely good news for startups.

However, credit usually comes with its fair share of criticism. On one hand, participating startups have earlier shared with Inc42 the sluggish nature of the Defence India Startup Challenge, where dates are extended often. Meanwhile, any war veterans have not been given benefits of the ‘One India One Rank pension’ scheme, which also reflects the limited applicability of the scheme, which the government claims — is a historic one.

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11.47 AM

Boost For Small Businesses: Faster Loans & Sourcing For SMEs, Women-Owned Enterprises

Piyush Goyal: We will source 25% material from SMEs and 3% from only women-owned SMEs for government industries. AI-based technology to be implemented for the upliftment of the MSME sector.

Inc42 Take: Goyal said that 9 AI portals will be made operational in India. However, the minister did not provide any clarity on data privacy and data protection. He also added that the government’s dedicated website for MSME borrowers offers automated processing of loans, which provides in-principal approval in less than an hour. The website reduces the turnaround time from 20-25 days to 59 minutes. Following the approval, the loan will be disbursed within a week. The commitment to source 25% material from SMEs and 3% from only women-owned SMEs will certainly bring up more small businesses in the country and have a direct impact on startups.

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11.45 AM

More LPG Connections To Drive Women’s Empowerment Initiatives

Piyush Goyal: 8 Cr free LPG connections will be provided under ‘Ujjwala’ Yojana.

Inc42 Take: This move can be considered as an important step towards women empowerment. As observed in the Rajasthan Yatra by Inc42, women’s empowerment in rural areas has been an important mandate for the government. According to 2015 data by United Nations Human Development Index, India stands at 135th position among 147 nations on women’s empowerment.

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11.40 AM

INR 500 Cr Mega Pension Scheme For Unorganised Sector

Piyush Goyal: A Mega Pension scheme of INR 500 cr for the unorganised sector, which will see an equal contribution from the government. A pension of Rs 3,000 is to be paid out per month to unorganised sector workers after retirement. About 10 cr workers will benefit from the scheme.

Inc42 Take: Ahead of the election, Goyal has announced a new pension scheme for workers and labourers from the unorganised sector, which will increase the Centre’s contribution to the sector by 4%. The pension amount has been increased from INR 3,500 to INR 7,000 per month.

The new pension scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide an assured monthly pension of INR 3,000 per month, with a government contribution of INR 100 per month, for workers in the unorganised sector after 60 years of age.

During Budget 2015-16, finance minister Arun Jaitley had announced the Atal Pension Yojana (APY) as part of the National Pension Scheme. Similar to the pension scheme announced today, the APY too was focussed on all citizens in the unorganised sector who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA).

Now, the government has announced another pension scheme with a budget allocation of INR 500 Cr. Clearly, the interim Budget seems to be interim in nature.

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11:27 AM

Small, Marginal Farmers To Get INR 6,000 Per Year In Direct Transfer

Piyush Goyal: Govt has approved for small and marginal farmers with land of up to 2 hectares. The government also give direct income support of Rs 6,000 per year to every small farmer. Poor farmers will get cash in three equal instalments under PM Kisan scheme along with increased Kisan credit limit. Goyal also announced a 2% interest subvention to farmers pursuing animal husbandry and fisheries.

Inc42 Take: The scheme will categorically benefit the majority of the landless farmers and will also prove to be a huge push to improve the income of the farmers. It will also have an indirect effect on the agritech startups which are working for improving the soil treatment and crop yield. However, the scheme would not affect the supply chain startups as the crop distribution system will remain centralised.

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11.26 AM

Scope For Startups In Animal Husbandry

Piyush Goyal: 2% interest subsidy to given to farmers involved in animal husbandry

Inc42 Take: The incentives will be passed on through the Kisan Credit Card scheme. Also, an additional 3% subsidy will be offered for timely payment of loans. This move is indicative of the government’s efforts to further push the agricultural community towards the digital economy. At the same time, this will be another opportunity for digital payment and agritech startups to align with the needs of the farmers, in line with the government’s efforts.

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11.25 AM

Pradhan Mantri Kisan Samman Nidhi Scheme Approved

Piyush Goyal: The Budget aims to provide assured income support to small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi initiative. Under this initiative, INR 6K per year per farmer will be transferred directly to farmers’ bank accounts in three instalments. Farmers with less than 2 hectares landholding are eligible for the scheme.

Keeping in view the distress in India’s agricultural sector, the government has also revised the minimum support price (MSP) in favour of farmers. Small and fragmented landholdings have led to a decline in farm income. 

The programme will be effective December 1, 2018, and the money will be directly transferred into farmers’ account. The expected spend on this scheme is INR 75,000 cr, said Goyal.

Inc42 Take: The initiative is in line with the government’s initiative to eliminate middlemen and help farmers realise better prices for their produce. Agricultural growth in India has been fairly volatile over the past decade, ranging from 5.8% in 2005-06 to 0.4% in 2009-10 and -0.2% in 2014-15. The decision is expected to improve the situation.

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11:24 AM

10 Lakh People Treated Under Ayushman Bharat So Far

Piyush Goyal: We organised the world’s largest healthcare programme — Ayushman Bharat — for 50 cr people; 10 lakh have benefited from the programme. We also opened the 22nd AIIMS in Haryana. Ayushman Bharat, the world’s largest healthcare programme, was launched to provide medical care to almost 50 cr people, resulting in savings of INR 3,000 crore by poor families.

Inc42 Take: As expected, interim finance minister Piyush Goyal spoke in length about the Modi government’s healthcare initiatives, the biggest among them being the world’s largest public health insurance scheme — Ayushman Bharat — launched last year.

The initiative is in line with the National Health Policy, which aims to double the government spend on healthcare — from 1.15 % of the GDP to 2.5% of the GDP by 2025. However, the budgetary allocation of INR 52,800 Cr for health in 2018-19 was hardly 5% higher than that of 2017-18 (INR 50,079.6 Cr).

Ayushman Bharat enables private players, including healthtech startups, to provide healthcare infrastructure on the basis of PPP models.

However, there isn’t much clarity yet on the Budget allocation for this health insurance programme, which claims to provide insurance to the common man of up to INR 5 lakh per family per year for hospitalisation expenses.

Increasing medical inflation is, however, adding to the worry to private players.

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11:22 AM

Electricity: Way To Drive Digitisation

Piyush Goyal: Everybody will get an electricity connection in the near future. We have provided 143 crore electricity bulbs to the poor in the last few years.

Inc42 Take: Goyal’s statement was met with heavy cheering from government supporters as well as booing from the opposing party members. Increased availability of electricity will automatically drive digitisation growth and increase internet penetration. Currently, internet penetration in rural India is 21.35%. This growth is set to help the consumer startups expand their reach as previously this was a major roadblock for startups to expand beyond Tier I cities.

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11.10 AM

‘Govt Has Achieved Macro-Economic Stability In Last 5 Years’

Piyush Goyal starts by recounting the achievements of the Modi-led government. Goyal claims that India has enjoyed the best phase of macroeconomic stability in the past 5 years. The fiscal deficit was 3.4% of the GDP for the financial year and has been set at 3.4 per cent for the next fiscal as well.

Inc42 Take: With a declining fiscal deficit, the central government may increase its allotment of funds for agricultural and infrastructural development to facilitate the prosperity of other industries. However, as the fiscal deficit target was set at 3.3% for 2018, the government has missed the target and has also increased the fiscal deficit estimate for the next financial year to 3.4%. This shows that the deficit is still essentially an unsolved problem.

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The post LIVE Union Budget 2019: Live News, Analysis And Impact On Indian Startups appeared first on Inc42 Media.

In the past decade, the startup funding scenario in India has evolved significantly. With 10 startups joining the unicorn club in 2018 alone, Inc42 DataLabs estimates that India will have more than 50 unicorns by 2020.

But for this to happen, the foundation has to be strong. A 2018 study by CB Insights showed that while less than 1% out of the focus group of VC funded startups have become unicorns, nearly 67% or two-thirds of the startups stalled at some point in their venture capital process and failed to exist or raise a follow-on funding.

While the study is based on US-based startups only, a similar problem exists in India as well.

And while it is easy to put your money on a proven concept, it’s a much tougher task to identify the potential Urbanclaps or Dunzos or Swiggys of tomorrow. Thus, the role of early-stage funds is an important factor contributing to the success of such startups.

As part of the Inc42 and Amazon Web Services’ (AWS) ongoing series – Over The Horizon, we write about investors who are impacting the Indian startup ecosystem. This time, we would like to move the spotlight on to some of the early-stage venture capital funds such as Menterra Ventures, Capier Investments, Parampara Capital, Astarc Ventures, Anthill Ventures, Endiya Partners, and SRI Capital, who hold  the ability to spot diamonds in the mud and motivate the  startups to dream big.

The Evolving Landscape Of India’s Early-Stage Investments

After the ‘spray and pray’ approach (in 2015) and the lessons learnt the hard way during the funding winter of 2016, Indian investors have become more cautious than ever. The number of bets per investor has gone down, however, the ticket size has gone up across stages.

According to Inc42 DataLabs, from 551 in 2017, the number of seed-stage deals have come down to 331 in 2018 — a 40% decline. On the other hand, the total amount invested in early-stage startups has gone up by a staggering 138%.

At present, there are over 416 venture funds who have a focus on the early-stage startups in India. The marquee VC funds like Kalaari Capital, Tiger Global Management, Accel Partners India, Sequoia Capital India, Blume Ventures, Nexus Venture Partners among others are already working in parallel with angel networks, HNI’s and corporate investors; and aggressively trying to bridge the gap between early-and late-stage ecosystems. However, a new breed of investors has entered the funding bandwagon and is supporting the early stage ecosystem.

Since the mechanism of an early stage, late or a growth stage varies, in order to understand how an early stage fund functions, how the selection criteria for startups functions, and to cater to other important factors which are considered when funds invest in the early stage startups — we connected with venture capital funds such as  Menterra Ventures, Capier Investments, Parampara Capital, Astarc Ventures, Anthill Ventures, Endiya Partners, and SRI Capital.

These funds primarily make small ticket investments in seed stage, in mostly Pre-Series A and Series A funding rounds and have a fund corpus in the range of $7 Mn – $100 Mn.

The Analogy Behind ‘Most Preferred Sectors’

While most funds prefer to be termed as ‘sector-agnostic’, in the real-world VCs do tend to prefer some sectors over the others. This can be attributed to the core principles of the fund, the in-house expertise, the growing market size, and/or profitable experiences from the past.

At the same time, a few funds are more concerned about the domain which startups operate within, namely Software-as-a-Service (SaaS), technology, consumer internet or others. For instance, Venkat Vallabhaneni of Parampara capital says, “We are sector agnostic but we usually avoid business models such as aggregators, marketplaces, app-only or ecommerce ventures.”

On the other hand, while talking to Menterra’s founder Mukesh Sharma on how deeply an early stage venture capital fund can be committed to solving the issues impacting masses at a ground level, he said, “We believe that big and game-changing differences in the outcomes will come only when we use big game-changing ideas that leverage the latest available science and technology. Business model innovations will merely give us incremental improvements. For instance, to reduce the cost of healthcare to 20% of current prices, or to increase farm yield by 5x, or to improve learning outcomes by 3x – a different approach is required,”

Here is a brief overview of investments made so far, by the early stage funds with whom Inc42 spoke with:

Overall, it turned out that deeptech, healthtech and enterprise tech startups have gained the maximum spotlight in the eyes of the early-stage VCs. As per an analysis by Inc42 DataLabs, in 2018 alone, in the early stage 31 deals were reported in enterprise tech, followed by 19 and 18 deals in deeptech and healthtech respectively.

But How Do These Funds Select A Startup?

As for Anthill Ventures, the mentors gauge the capabilities of startup founders with respect to market needs, their future plans to build world-class offerings and their humility in accepting the need to pivot when needs of the customers change. And, this has resulted in blooming of startups such as 91springboard, Roadzen, Travelio, Uniti Electric car and ShieldSquare (recently acquired by Israel-based Radware). Moreover, Vanga adds,

“The value of our portfolio (25 startups) has grown over 400% in the last three years with 70% of the companies raising follow on capital at a substantially higher valuation.”

For Parampara Capital, the importance lies in the presence of technology IP/innovation in the business model, a fully functional and marketable product, proof of market acceptance along with some revenue traction. This is how the fund identified S-Cube Futuretech — a startup that develops software solutions for the structural and civil engineering industry — and also recently got major exit from US-based Bentley Systems.

On the other hand, Capier Investments works with super-early-stage startups having little or no revenue, hence a startup’s team and their idea become the most critical element for Capier Investments whether or not to go ahead and fund. M.A further adds,

“90% of our portfolio of investments have been able to secure follow on rounds through new investors or through marquee investors and that is a great validation of our investment thesis.”

Apparently, the startup’s commitment to innovation, exciting technology and an impacting business model is non-negotiable, but that is not enough either. As Sharma from Menterra says, “Without serious execution discipline, financial results and impact, objectives will not be delivered. So, for us, financial metrics and discipline both are as important as the impact is and we do not sacrifice one for the other.”

And this ideology has helped the fund identify startups like Farm Folks, Biosense and EZ Vidya at their early stages.

Quite interestingly, SRI Capital, which offers higher ticket investments looks for a proven business model that can scale up if provided with strong capital and global network in the B2C sector. In the B2B sphere, the fund looks for a unique IP and credible US customers.

It is not always necessary for a startup to get a major exit, even building a sustainable business model is more than sufficient. And with that mentality, Astarc Ventures selects a startup on the basis of a deep-pain point being solved, large market size, quality of the founding team, the uniqueness of the solution, scalability, and defensibility.

Similarly, Endiya Partners looks out for product-based startups with global aspiration and has an exciting technology that helps people solve problems easily. And, that is the secret behind spotting the diamonds in the mud, which has given rise to startups such as Little Eye Labs, which was acquired by Facebook and other successful startups such as ShieldSquare (acquired by Radware), and IncNut (acquired by iStyle).

Early Stage Startups: The Growing Support System

The startups which took off between the ’90s and 2000s were either bootstrapped or primarily survived on the money from family offices. However, post-2010, with the rise of consumer-oriented online startups such as Flipkart, Zomato, Zoho, Ola and OYO, investor interest in startups grew. With their fast-growing appeal among urban dwellers, these startups made it easy for investors to see the value in Indian startups.

And once these trailblazers created India’s own unicorn club, India became an important business opportunity for the VC funds to ensure the deal-inflow in order to keep them afloat and deploy the funds at the right time in the right number of startups.

The most important thing here is building the right network. To this end, Parampara has built a network and has various stakeholders in the ecosystem such as investment bankers, venture capital funds, angel networks and incubators/accelerators who provide the fund with a funnel for sourcing deals.

At the same time, at the global front, Anthill Ventures has nine sourcing hubs globally where its venture partners are building local relationships with family offices, accelerators, funds and corporates.

Other than these, there are a number of channels opted by the early-stage VC funds to source startup deals. As Hari Krishnan of Astarc Ventures says, “There are multiple ways — inbound leads, referrals from the network of funds/angels, events which we attend, other founders, etc. We also have Venture Partner Programs where we have a few people helping us with sourcing deals, and also Refer a Startup program where anyone can refer deals and be a part of the success of the startups by sharing the upside through carrying.”

The Changing Funding Scenario

As per Inc42 DataLabs’ analysis, Chinese and Japanese were involved in a large number of deals with the total deal count standing at 77 in 2018 with an aggregate value of $3.6 Bn. One of the most widely known names in the world of investment – Warren Buffet’s Berkshire Hathaway – made a debut in the Indian market last year by investing $300 Mn in One97 Communications Ltd, the parent organisation of Paytm.

A lot of other US-based venture capital firms are making an entry into the country’s growing startup hub and some popular names among them are Insight Venture Partners, Think Investments, Northpond Ventures and Mithril Capital Management.

Chinese internet giant Alibaba is playing a crucial role when it comes to investing in Indian Startups.

Recently, China’s largest bank, Industrial and Commercial Bank of China has shared its plans to invest in India’s local startups and small-and-medium sized enterprises with a $200 Mn fund in its pocket. Among all, Japanese MNC holding conglomerate SoftBank the most active investor in India has roughly deployed over $10 Bn in Indian startups to date.

“India is on the cusp of tremendous growth in its startup ecosystem with impressive growth in the quantity and quality of all stakeholders — startups, VCs. PE players, lawyers, incubators, etc,” says Vanga.

The Rising Investor Party

The rising interest in the Indian startup ecosystem has led to the launch of multiple funds and international funds making their debut in the country’s startup hub. But, is this a threat to the funds working with small-ticket investments?

Krishnan of Astarc Ventures adds, “At every stage in the investment spectrum there are opportunities for a fund. So with bigger funds and increasing ticket sizes, the early stage of the spectrum becomes clear and there are many opportunities for funds like ours. We have also been partnering with larger funds to ensure adequate capitalisation of the startups who we invest in, to give them enough runway to achieve their future milestones.”

On the other hand, Reddi of SRI Capital says that being an early-stage fund, they tend to invest $1 Mn to 2 Mn at the Pre-Series A stage, which is, in fact, a positive point because major VCs in India only write Series A/B/C cheques. Even funds like Menterra, Capier Investments, Endiya Partners or Anthill Ventures do not find this as a threat. Instead, they say it tends to help startups cope up with the initial challenges where funds with bigger ticket investment will add more fuel to their tanks in the latter stages.

For most of the funds we spoke with, the participation of international investors in India is benefitting a lot of startups since they provide a wider network to them for scaling up. According to Vallabhaneni, this has also improved the exit possibilities for the investors since a lot of international companies have started looking at Indian startups for their technological capabilities which are evidenced by acquisitions made by Facebook and Google in India.

However, in the end, everything boils down to one question — Does a startup founder want you (an early-stage VC fund) to invest in their company? Well, while every budding entrepreneur may have their own ifs and buts, the VC’s Inc42 talked with, have a few suggestions for helping them pick the right investor:

• Whether the Investor truly adds value – that is, in addition to capital do they bring expertise, connections, know-how and other resources that can help a startup at different phases.
• Whether the investors share a similar vision for the company or not?
• Assessment of how prospective funds have partnered with their portfolio companies especially during a downtime.
• Track record of backing companies with additional funding and resources over a longer period which is critical for riding through difficult phases especially when the external funding dries up.
• Quality and structure of the LPs in the fund, their expectations and alignment with the fund manager are other areas to look at.

And as SRI capital’s Sashi Reddi rightly said,

“Founders should pick VCs who have real operating experience. All money might seem the same when companies are looking to raise funding but when there are tough times, the founders will need advice from people who have actually built companies.”

The post How Homegrown Funds Are Going Over The Horizon To Help Indian Early-Stage Startups Succeed appeared first on Inc42 Media.

After wrapping up a busy 2018 with The Ecosystem Summit in November, bringing together over 250 entrepreneurs, investors, and senior government officials, we at Inc42 are keeping the ball rolling with the Mixer to be held on 28th February.

The Inc42 Mixer has been bringing together entrepreneurs, investors and influencers since 2015.

At the time, when we were planning our first edition of the Mixer, we came up with a description of what it should be: “An insanely diverse set of passionate and creative people, a fun evening with an emphasis on bonding rather than networking, peer to peer learning and new relations!”

And this idea has grown over the last three years, pulling in an eclectic mix of people who are making a meaningful contribution to the Indian startup ecosystem. Be it Delhi or cities like Chennai, Inc42 Mixers have witnessed startup verse networking and building connects beneficial for their companies in an informal setup and where everyone can meet anyone without any appointments required

However, since all our events are invite-only, thus, you will have to qualify for attending it!

And this time, we at Inc42 have planned a fun-filled, evening with #Noagenda #NoJudgements and #NoPressure.

The Mixer will bring together Delhi’s over 100 guests comprising of:

• Startups
• Investors
• Incubators & Accelerators
• Ecosystem Enablers

Entrepreneurs who came for our January F.O.U.N.D.E.R.S. Meetup at the Inc42 headquarters rooftop know that we can throw a mean party. And this continues to be our motto. So come join us on February 28, we will be hosting 100 guests across the ecosystem in Delhi with one simple aim – to let loose and have fun!

Applications are now open with an entry fee of INR 1,999 INR 3,999. To ensure you are one of the selected 100 attendees, so apply now!

Inc42 Events: What’s On The Table This Year?

We at Inc42  believe that the best way to cover the Indian startups is by creating a platform for the people who power it through their work and ideas. To celebrate their contributions and bring together the movers and shakers of the ecosystem we hold many events throughout the year.

Be it bringing together Indian investors & VCs via our VC Dinner or via bringing together or be it enabling peer to peer learning via The Dialogue and most importantly, our flagship conference — The Junction — an invite-only gathering of 300 key stakeholders of India’s technology and startup ecosystem, all lined up for the next 11 months!

So whether you are a first-time entrepreneur or a seasoned veteran, If you want to network with the startup ecosystem folks, we host some of the coolest networking happy hours, panel discussions, pitch sessions and mixers each month.

The post Inc42 Mixer Alert! A Chance To Network With The Best Of Delhi’s Startup Community appeared first on Inc42 Media.

Hosted by Deloitte, Morning Pitch, one of the most popular weekly pitch events in Japan is now fast gaining popularity in startup hotbeds around the world including Silicon Valley, India, and Singapore.

The fourth Indian edition of Morning Pitch event concluded on Feb 27, 2019, with four startups — Scribble Data, Ayasta, Minance and InTain — pitching their ideas for partnerships, funding and M&As interest.

Speaking at the event, Sudeepta Veerapaneni of Deloitte gave an account of Deloitte India Catalyst program which has been tracking over 50,000 startups in India and is helping 200+ startups to be successful. Deloitte India Catalyst helps Startups, ScaleUps and Enterprise clients across 11 domains covering exponential technologies, Future OF Work, Future Of Mobility, Future Of Cities etc.

Debabrat Mishra, Partner and Lead Innovation & Alliances, Deloitte Consulting India told Inc42,  “We are happy to see the success of the Morning Pitch platform in India and will now scale it up for wider coverage. Making Indian startups successful is the focus of our Deloitte India Catalyst program and the Morning Pitch platform is a great enabler.”

What’s The Hype Around Morning Pitch?

Morning Pitch has created history in Japan, a book on Morning Pitch even went on to become an Amazon bestseller in 2015.

Over 1,250 startups, so far, have pitched their ideas at Morning Pitch in Japan which has been hosted over 270 times since its inception.

So, what’s been result of these pitches?

“In Tokyo, every Thursday morning 200 Corporate Managers, Venture Capitalists, and Government Officials start their day by exploring opportunities to work with Startups through Morning Pitch. The platform has in fact resulted in 15+ IPOs and 200+ business alliances in Japan,” exclaimed Vinod Vasudevan and Rohan Wadhwa of Deloitte Japan.

Inspired from its local success, Deloitte soon started hosting Morning Pitch across the world. And, India, being the third largest startup ecosystem with over 39,000 startups, was a naturally aligned choice, thanks to the Japanese stake in Indian startup ecosystem.

Japanese investors have been leading Indian startup ecosystem since the beginning, the ecosystem which investor Mohandas Pai says will create a $10 Tn by 2030, seems to have generated new interests among Japanese entrepreneurs too.

The Morning Pitch, thus, can be instrumental for startups seeking international collaborations.

Suchint Majmudar, Partner, Deloitte India said, “Morning Pitch gave the participating Indian ventures an opportunity to sharply define their propositions and present them to a bespoke, predominantly Japan-focussed audience, thereby successfully serving as a catalyst for Asia-Pacific relationships and collaborations.”

Attended by partners from corporates and investors like Toyota Tsusho, Infosys, Rakuten, Tokio Marine, Keiretsu, Orios VP, Nvidia among others, the fourth Morning Pitch in India provided the four startups — an effective platform — seeking collaboration, investments and M&A.

The fourth Indian edition of Morning Pitch event saw participation from startup evangelists and corporates under one roof which enabled conversations leading to business associations between startups, investors and corporates.

In the past three Indian editions, startups including Niramai, Ethereal Machines, TagBox Solutions, Artivatic.Ai pitched to the attendees from large Japanese corporations Murata, Rakuten, Nomura, Toyota Tsusho; International corporations such as Bosch and Nvidia along with VCs and ecosystem stakeholders such as Blume Ventures, Intuit Circles, Headstart.

Yuma Saito, General Manager, Deloitte Japan, said “We are delighted to be hosting a platform where startups, investors, and corporations can convene for creating alliances and the co-development of the Indian Startup Ecosystem ”

Meet The Four Startups Who Pitched At The Fourth Indian Morning Pitch

Scribble Data: In the last few years, ML and AI change the way of looking at data. While ML became an inherent part of most of the data fiduciaries to automate various parts of their data communication, Bengaluru-based Scribble Data is a data engineering company, building software infrastructure to accelerate and productionise ML in such organisations.

Scribble Data helps organisations take their ML models from lab to production quickly and reliably, by focusing on feature engineering.

InTain Technologies: Chennai-based AI startup InTain introduced eMulya combining blockchain and AI for efficient, secure and trustworthy financial systems. Intelligent Blockchain for Asset Securitisation that addresses some of the triggers of the 2008 financial crisis is one of the first platforms built by InTain.

The startup has deployed Hyperledger fabric in eMulya and is currently eyeing for the US market.

Speaking at the event, Siddhartha, CEO-InTain said, “In countries like India securitisation has been a big issue. What a combination of blockchain and AI does is that it makes the same data available to every peer which means the Lender and Lehman Brothers are seeing the exact same data. This minimises the risk. The AI brings data automation to it. Blockchain and AI collectively not only bring transparency and efficiency but also, effectively help in forecasting.”

Siddhartha added that securitisation via crypto-asset could be another option; however, that would face regulatory hurdles.

Ayasta: Hyderabad-based Ayasta aims to create an intelligent connected grid and build grid to socket intelligence inside facilities. Ayasta has built a proprietary platform called CEGMA, which is a culmination of Sensors, ML and CV to monitor, analyse and detect anomalies in the electrical systems both inside a given facility and outside in the electrical grid.

Founded by Raghu Kumar Manchukonda, Ravi Teja Avasarala and Saideep Reddy in 2017, the T-Hub incubated startup has already big names like Tata Steel, Hindustan Petroleum and Adani Group and Brigade Group as backers.

Minance: Bengaluru-based Minance is a personal wealth manager. It helps users invest in innovative financial products, manage their taxes, and plan their investments. In India, several corporates including – Google, Walmart, Alibaba, Microsoft, Reliance, Hero Group, Times Internet etc. Recently, Britannia, Meenakshi Group, Procter & Gamble India, and RP-Sanjiv Goenka Group have been supporting startups in terms of funding or collaborations.

However, this was not easy, Anurag Bhatia founder and CEO of Minance said, “Initially, we went to door-to-door to acquire the first few hundred customers.”

The company targets for investment management for an INR 15 Lakhs to INR 25 Cr window. Having launched a slew of products such as ASSETS PAY CASH, PRIVATE ASSETS, BLOOM, MUTUAL FUNDS and more, the company is set to launch another slew of products this year and is open to collaborate and acquire other startups to strengthen its hold on AI and related technologies.

Deloitte India Catalyst: Creating An Ecosystem For Indian Startup Success

As the largest professional services network in the world by revenue and number of professionals, Deloitte with its consultancy expertise has fast emerged as an essential name in the startup ecosystem too.

While Deloitte Tech Fast 50 has been ranking and awarding top 50 SMEs, startups and other companies for the last 14 years based on percentage revenue growth over three years, Deloitte India Catalyst creating a network of leading startups working to translate the potential of disruptive technologies into practical business solutions for the firm and its clients.

Combining what it offers through, the Morning Pitch, Fast 50and Deloitte India Catalyst, the firm is committed to creating success stories through an ecosystem for Indian startups. Indian startups can leverage the ecosystem and the Catalyst program to be successful in India and to connect to global markets through Deloitte’s global network.

The post With 4 Startup Pitches, 70+ Attendees, Deloitte Concludes Fourth Edition Of Morning Pitch In India   appeared first on Inc42 Media.

India today is home to more than 39K startups. The Indian startup ecosystem is producing unicorns at double the speed than before, with multi-billion dollar fundings from global investors, and celebrating high-profile exits such as the $16 Bn Walmart-Flipkart acquisition last year. At the same time, the country’s micro, small, and medium enterprises (MSME) sector comprising 577 Cr companies is beating challenges of setting up and building the consumer base, among others.

But an idea remains an idea if it does not get the requisite working capital on time. According to reports, less than 5% of MSMEs have access to formal credit, while others rely on informal sources to fund their businesses. For Indian startups, while there are a number of private equity and debt funding options available, to get funding at the idea or early stage is a challenge.

In a much-needed move to address this gap, the Indian government has rolled out initiatives to offer business loans for startups and MSMEs through authorised channels. Among the several MSME schemes for entrepreneurs, one of the most important ones was the recently-launched 59-minute loan platform that enables easy access to credit for MSMEs.

Also, the Small Industries Development Bank of India (SIDBI) has started lending to companies directly instead of through banks. These government loans for startups are at least 300 basis points lower than the ones that are offered by banks. SIDBI offers long-term loans of up to five years online.

A number of other government startup loans and schemes for entrepreneurs in India have been introduced in the past few years. Here is a list of some of the most popular and notable government schemes that offer business loans for startups And MSMEs in India.

1. 42 (End to End Energy Efficiency) – Click to read more ➤
2. Bank Credit Facilitation Scheme – Click to read more ➤
3. Credit Guarantee Scheme (CGS) – Click to read more ➤
4. Credit Linked Capital Subsidy for Technology Upgrades – Click to read more ➤
5. Coir Udyami Yojana – Click to read more ➤
6. MSME Business Loans For Startups In 59 Minutes – Click to read more ➤
7. Pradhan Mantri Mudra Yojana (PMMY) – Click to read more ➤
8. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE) – Click to read more ➤
9. Standup India – Click to read more ➤
10. Sustainable Finance Scheme – Click to read more ➤

4E (End to End Energy Efficiency)

Launched in: September 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: MSME startups in the manufacturing or services sector that have been operating for at least three years and have earned cash profits in the last two years are eligible for the loan. Here are the specific eligibility criteria.

• The startup should not be in default with any bank/financial institutions
• It should have undergone a process of detailed energy audit (DEA) through a technical agency/consultant that is a Bureau of Energy Efficiency (BEE)-certified energy auditor
• The detailed project report (DPR) prepared by the technical agency/consultant should have been vetted by the Energy Efficiency Cell (EEC), SIDBI
• The unit should not have availed a performance linked grant under the World Bank-Global Environment Facility (WB-GEF) Project for the proposed energy efficiency (EE) Project and should be in compliance with the Environment and Social Management Framework

Overview: This MSME scheme for entrepreneurs has been launched jointly by India SME Technology Services Ltd (ISTSL) in association with World Bank. The main objective is to implement energy efficiency measures across Indian industries on an end-to-end basis. Also, it aims to help startups finance purchases of second-hand machinery/equipment.

The business loans for startups under this scheme meet part costs of:

• capital expenditure, including for the purchase of equipment/machinery, installation, civil works, commissioning, etc.
• any other related expenditure required by the unit provided it is not more than 50% of capital expenditure.

Fiscal incentives under the 4E scheme:

• The MSME startup has to pay only INR 30,000 and applicable taxes and the balance fee will be paid by SIDBI to auditors
• Up to 90% of the project cost with a minimum loan amount of INR 10 Lakh and a maximum loan amount not exceeding INR 150 Lakh per eligible borrower can be granted under this scheme.
• Eligible loan amount should not exceed one-fifth of the total turnover of the applicant unit.

Time period: The repayment period, including the initial moratorium period of up to six months, shall not be more than 36 months for loans up to INR 100 Lakh and 60 months for loans beyond INR 100 Lakh.

To know more about this startup scheme by the Indian government, click here.

Bank Credit Facilitation Scheme

Launched in: NA

Headed by: National Small Industries Corporation (NSIC)

Industry: Sector-agnostic

Eligibility: MSMEs registered in India

Overview: The scheme aims to meet the credit requirements of MSME units. The NSIC has entered into a MoU with various nationalised and private sector banks for the purpose. Through syndication with these banks, the NSIC arranges for credit support (fund- or non-fund-based limits) from banks without any cost to MSMEs.

Fiscal incentives: NA

Time period: The repayment period varies depending on the income generated from the startup and generally extends from five to seven years. However, in exceptional cases, it can go up to to 11 years.

To know more about this startup scheme by the Indian government, click here.

Credit Guarantee Scheme (CGS)

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector-agnostic

Eligibility: The scheme is applicable to new and existing MSMEs engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, self-help groups (SHGs), training institutions, etc.

Overview: The Credit Guarantee Scheme was launched by the government to strengthen the credit delivery system and to facilitate the flow of credit to the MSME sector. The lending institutions under this scheme mainly include public, private, and foreign banks, along with regional rural banks and the SBI and its associate banks.

Fiscal incentives: This MSME scheme for entrepreneurs comes with a number of benefits, including term loans and/or working capital loan facility up to INR 200 Lakh per borrowing unit. Here are some more details of the scheme:

• The guarantee cover provided is up to 75% of the credit facility up to INR 150 Lakh
• 85% of credit facility for loans up to INR 5 Lakh is provided to micro-enterprises
• 80% of credit facility for MSMEs owned/operated by women and all loans to NER including Sikkim
• For MSME Retail trade, the guarantee cover is 50% of the amount in default subject to a maximum of INR 50 Lakh.

Time period: The credit guarantee will commence from the date of payment of guarantee fee and will run through the agreed tenure of the term credit in case of term loans/composite loans and for a period of five years where working capital facilities alone are extended to borrowers, or for such period as may be specified by the guarantee trust.

To know more about this startup scheme by the Indian government, click here.

Credit Linked Capital Subsidy for Technology Upgrades

Headed by: Office of the Development Commissioner, Ministry of MSMEs

Industry: Sector-agnostic

Eligibility: Existing small-scale industry (SSI) startups registered with the State Directorate of Industries that have upgraded their existing plant and machinery with state-of-the-art technology, with or without expansion, are eligible for this scheme. Also, new SSI units registered with the State Directorate of Industries that use the appropriate, eligible, and proven technology, duly approved by the Governing and Technology Approval Board (GTAB)/Technical Sub­Committee (TSC), will be eligible.

Overview: This business loan for startups aims to facilitate technology upgrades by providing upfront capital subsidies to SSI units, including khadi, village, and coir industrial units, on institutional finance (credit) availed by them for modernisation of their production equipment (plant and machinery) and techniques.

Fiscal incentives: The ceiling on business loans for startups under the scheme has been raised from INR 40 Lakh to INR 1 Cr while the rate of subsidy has been enhanced from 12% to 15%. Here, the admissible capital subsidy is calculated with reference to the purchase price of plant and machinery, instead of the term loan disbursed to the beneficiary unit.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Coir Udyami Yojana

Headed by: Coir Board

Industry: Agriculture

Eligibility: All coir processing MSME startups registered with the Coir Board under the Coir Industry (Registration) Rules, 2008, are eligible for this scheme. Here is the criteria:

• Assistance under the scheme will be made available to individuals, companies, self-help groups, NGOs, institutions registered under the Societies Registration Act 1860, production co-operative societies, joint liability groups, and charitable trusts
• Startups that have already availed of a government subsidy under any other scheme of the Indian government or any state government for the same purpose are not eligible to claim a subsidy.

Overview: The scheme is aimed at supporting the establishment of coir units. Banks will finance capital expenditure in the form of a term loan to meet the working capital requirements in the form of cash credit. Projects can also be financed by the bank in the form of composite loans consisting of capex and working capital.

Fiscal incentives: Banks will support project cost of up to INR 10 Lakh plus one cycle of working capital, which shall not exceed 25% of the project cost. In addition:

• This should be exclusive of the INR 10 Lakh limit proposed.

• The amount of credit will be 55% of the total project cost after deducting 40% margin money (subsidy) and the owner’s contribution of 5% from beneficiaries.
• The subsidy will be computed excluding working capital component.

Time period: Rate of interest chargeable for the business loans for startups shall be at par with the base rate. Repayment schedule may not exceed seven years after an initial moratorium, as may be prescribed by the concerned bank/financial institution.

To know more about this startup scheme by the Indian Government, click here.

MSME Business Loans For Startups In 59 Minutes

Launched in: September 2018

Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Industry: Sector Agnostic

Eligibility: For existing businesses: Borrower should be GST, IT compliant and must have six months bank statement facility. The business loan eligibility is determined by a company’s:

a. Income/ Revenue
b. Repayment capacity
c. Existing credit facilities
d. Any other factors as set by lenders (banks)

Overview: Prime Minister Narendra Modi described this initiative last year while unveiling the 12-point action plan for the MSME sector. The initiative aims at automation of various processes to loan appraisal in such a way that one gets an eligibility letter, in-principle approval in less than 60 minutes and chooses the bank that one may prefer to ease access to credit to smaller and micro enterprises.

Post the in-principle approval, the time taken for business loan disbursement depends on the information and documentation provided on the platform and to the banks. Generally, post the in-principle approval, the loan is expected to be sanction/disbursed in 7-8 working days.

Fiscal Incentives: The contactless business loans for startups are currently provided for value from INR 1 Lakhs Upto INR 1 Cr. The rate of interest starts from 8% onwards.

Time Period: NA

To know more about this startup scheme by the Indian government, click here.

Pradhan Mantri Mudra Yojana (PMMY)

Launched in: 2015

Headed by: Micro Units Development and Refinance Agency Ltd (MUDRA)

Industry: Sector-agnostic

Eligibility: Non–corporate small business segment (NCSB) comprising proprietorship/partnership firms in rural and urban areas can apply for the loan. Here are some examples of NCSBs:

• small manufacturing units
• service sector units
• shopkeepers
• fruits / vegetable vendors
• truck operators
• food-service units
• repair shops
• machine operators
• small industries
• artisans
• food processors and others

All kinds of manufacturing, trading and service sector activities can get a MUDRA loan.

Overview: MUDRA provides refinance support to banks/Micro Finance Institutions (MFIs) for lending to micro units that have loan requirements of up to INR 10 Lakh. According to recent media reports, in the financial year 2017-18, overall business loans worth INR 2.54 Lakh Cr were classified as Mudra loans, an increase of 41% from INR 1.80 Lakh Cr loans sanctioned in this category in the last financial year.

For 2018-19, a target of INR 3 Lakh Cr has been set. Interestingly, the non-performing assets (NPA) level under the PMMY was only 5.38% as on March 31, 2018 — almost half of the gross NPAs across all sectors in the country, which crossed 10% in fiscal 2017-18.

Fiscal incentives: MUDRA offers incentives through these interventions:

> Shishu: Loans upto INR 50,000

> Kishor: Loans above INR 50,000 and up to INR 5 Lakh

> Tarun: Loans above INR 5 Lakh and upto INR 10 Lakh

Generally, loans upto INR 10 Lakh issued by banks to MSMEs are given without collateral. Also, within these interventions, MUDRA ensures to meet the requirements of different sectors/business activities as well as business/entrepreneur segments.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)

Launched in: August 2015

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: New enterprises in manufacturing as well as the services sector can apply for this scheme. Existing enterprises undertaking expansion, modernisation, technology upgrades, or other projects for growing their business will also be covered.

Overview: The aim of this scheme is to provide soft loans, in the nature of quasi-equity, and term loans on relatively soft terms to MSMEs to meet the required debt-equity ratio for the establishment of new MSMEs and also to enable the growth for existing ones.

Fiscal incentives:

• For the general category, 10% of the project cost, subject to a maximum of INR 20 Lakh is provided as the loan amount
• 15% for the enterprises promoted by Scheduled Caste (SC) /Scheduled Tribe (ST) / Persons with Disabilities (PwD), and women, subject to a maximum of INR 30 Lakh
• Persons belonging to these categories must own a controlling stake (ie 51% or higher)

Time period: On expiry of three years from the date of the first disbursement, the outstanding soft loan, together with any dues thereon, shall be converted into a secured term loan and the entire loan shall carry an applicable rate of interest as per internal rating of the borrower. The repayment period is generally upto seven years, inclusive of the moratorium up to one-and-a-half years for the term loan and up to two years for a soft loan.

To know more about this startup scheme by the Indian government, click here.

Standup India

Launched in: April 2016

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Sector-agnostic

Eligibility: Enterprises in trading, manufacturing, or services. In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by an SC/ST or woman entrepreneur. The borrower should not be in default with any bank or financial institution.

Overview: This scheme by the Indian government facilitates bank loans between INR 10 Lakh and INR 1 Cr to at least one SC or ST borrower and at least one woman borrower per bank branch, for setting up of a greenfield enterprise. So far, 3457 online business loans for startups have been sanctioned through the Standup India platform.

Fiscal incentives:

• It offers composite loans between INR 10 Lakh and INR 1 Cr to cover 75% of the project, inclusive of the term loan and working capital
• The stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost
• The rate of interest would be the lowest applicable rate of the bank for that category (rating category) not to exceed [base rate (MCLR) + 3%+ tenor premium]

Time period: This government business loan for startups is repayable in seven years with a maximum moratorium period of 18 months.

To know more about this startup scheme by the Indian government, click here.

Sustainable Finance Scheme

Headed by: Small Industries Development Bank of India (SIDBI)

Industry: Green energy, non-renewable energy, technology hardware, renewable energy

Eligibility: Renewable energy projects such as solar power plants, wind energy generators, mini hydel power projects, biomass gasifier power plants, etc, for captive/non-captive use (ie, power generated is sold/supplied to the grid/off-grid).

• Any kind of potential cleaner production (CP) investments including waste management
• Suitable assistance to original equipment manufacturers (OEMs) which manufacture energy efficient/cleaner production/green machinery/equipment
• Either the OEM should be an MSME or it should be supplying its products to a substantial number of MSMEs

Overview: The objective of this startup scheme by the government is to assist the entire value chain of energy efficiency (EE)/cleaner production (CP) and sustainable development projects which lead to significant improvements in EE/CP/sustainable development in the MSMEs and which are presently not covered under the existing sustainable financing lines of credits.

Fiscal Incentives: Suitable assistance by way of term loan/working capital to ESCOs implementing EE/CP/Renewable Energy project provided either the ESCO should be an MSME or the unit to which it is offering its services is an MSME. The rate of interest will be applicable on basis of credit rating of MSMEs.

Time period: NA

To know more about this startup scheme by the Indian government, click here.

Since the launch of the Startup India Action Plan and Standup India scheme in January 2016, and the setting up of the Funds of Funds worth INR 10K Cr, more than 50 government schemes for small businesses have been put in place to support early-stage startups in taking off.

These government loans for small-scale industries are a handful of the many initiatives taken by the Indian government to boost the ease of doing business in the country. India ranked 77th in 2018 on the World Bank matrix in ease of doing business.

The government has been working at a macro level to promote entrepreneurship and opening up international startup corridors between India and the world. To this end, the Department of Industrial Policy and Promotion (DIPP) also launched the State Startup Ranking framework, on the basis of which it ranked states on the startup ecosystems, with Gujarat emerging on top of the chart.

At the micro level, the government’s efforts to offer business loans to startups and MSMEs will certainly supplement its larger gameplan and enable more entrepreneurs to turn their ideas into businesses.

The post 10 Business Loans For Startups And MSMEs By The Indian Government appeared first on Inc42 Media.

Bengaluru-based ride-hailing company, Ola has finally confirmed investment from Flipkart cofounder Sachin Bansal. In a statement released today, Ola announced that Sachin has led an investment of $92 Mn (INR 650 Cr.) in the company.

Bhavish Aggarwal, cofounder and CEO, Ola said, “We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled. His investment is a huge encouragement for all of us at Ola and our mission to serve a billion people.”

The investment, which is part of Ola’s ongoing Series J funding round, is the largest investment by an individual in Ola till date. Cofounded by Bhavish Aggarwal and Ankit Bhati in 2011, Ola is currently looking to raise capital from sources other than SoftBank, its largest institutional stake holder, to prevent the Japanese conglomerate from taking over the ride hailing company.

Earlier in January, a Ministry of Corporate Affairs filing showed that Bansal had made an investment of $21 Mn in the company. At the time company sources had told Inc42 that the investment would be part of a larger $91 Mn funding by the Flipkart cofounder.

After Sachin Bansal’s investment, total funding in Ola’s ongoing Series J round has now risen to about $166 Mn. The company had earlier raised $74 Mn (INR 520 Cr) from its existing investor, a Hong Kong-and London-based hedge fund, Steadview Capital, through preference shares at a subscription price of $301 (INR 21,250) per preference share, according to a company filing accessed by Inc42.

Commenting on the investment, Sachin Bansal, said, “Ola is one of India’s most promising consumer businesses. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today.

The Ola funding represents his most prominent and largest investment to date, and his first major deal since he left Flipkart following its sale to Walmart for $16 billion last year.

Sachin Bansal left Flipkart $1 Bn (INR 6,955 Cr) richer. He has recently acquired two residential properties worth $6.39 Mn (INR 45 Cr) in Bengaluru. Bansal  also recently started a new venture, BAC Acquisitions Pvt Ltd along with a friend and former investment banker Ankit Agarwal. Further, there is speculation about Bansal investing $50–100 Mn (INR 347 Cr- 695 Cr) in an electric vehicle startup Ather Energy.

Meanwhile Ola has been busy expanding globally in the last one year. In 2018 the company launched its operations in Australia, UK, and New Zealand. The company also reportedly set up teams in Dhaka, Bangladesh and Colombo, Sri Lanka.

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