Publication Name: Light Reading
Date: December 16, 2013
In any economic environment, innovation and diversification are the key mantras for success. But the act or process of innovating today also involves collaboration, to turn the innovation into a successful business too. So those firms or individuals who have the ability to bring together others effectively are able to create a bigger difference and impact.
Perhaps with this understanding and objectives in mind, Tata Elxsi, a Bangalore-based design services firm decided to set up a business incubator late last year, which aims at nurturing and supporting entrepreneurs. The program aspires to provide a platform for start-ups and prospective entrepreneurs to convert their ideas into commercially viable products or services.
“We [in the IT and telecom industry] are more used to a model in which we do revenue realization in a near term. The important aspect is to be very clear from the beginning that a return-on-investment realization is aimed at mid- to longer-term,” says Rajesh Kumar, V-P, Strategic Initiatives, Tata Elxsi.
In No Hurry
Given the present testing times, any organization may find it really challenging to build its own team without knowing the outcome on its return on investment. However, there is no better way to identify those innovative ideas and nurture them to become independent, while ensuring your profits and returns in the long term.
The company says that it is in no hurry and looks to incubate five-to-eight companies every year with an approximate incubation period of 18-24 months. “We want to nurture the companies fully and make sure they are successful when they are out from incubation period. Hence we are in no hurry,” says Kumar.
The incubator program headquarter has been set up in Bangalore. However, the program is open for startups in the space of mobile, cloud, embedded applications and related areas across India. Kumar adds that they are open to new and interesting ideas to accelerate their growth and assist those who could be provided with value addition based on Tata Elxsi’s own strengths.
Tackling Challenges
The company, through its incubator program, is following the golden principle which says that you can't remain unbeaten for a long time if you do not have a team to support you. But is building the ecosystem and growth-teams this way is all easy, considering the fact that startup culture in India is still far from being a success?
“Yes, you are right. One of the major challenges is readiness of the Indian market. In India, the market positioning of various startups is not clear. But here is what we offer as key differentiator,” says Kumar.
“The selected startups will get assistance from specialized mentors and will get to use our ready-to-use infrastructure. They will also get the dedicated support for various marketing and related areas and the advantage of our huge network that we have built over the years. As far as returns are concerned, under the program, we would take 10 percent equity benefits after 18 months.” Kumar adds.
The company said that it was very hopeful of the developments around the world and ready to imbibe learning’s from the global market. It has already enrolled Big V Telecom, a tech startup that offers enterprise business solutions in selected regions of India.
The company believes that efforts like these will help it increase its service offerings and make the ecosystem more active. In January 2013, Tata Elxsi also entered into a strategic partnership with Get2Volume to incubate and grow technology companies in India and Singapore.
The design firm’s consolidated revenues for the quarter ended September 30, 2013 stood at Rs 189.97 crore, indicating a growth of 22.3 percent year-on-year, over Rs 155.36 in Q2 of FY13.
The company did not disclose the total value of the fund, adding that it has not set up any specific targets as of now but was just looking at the right companies to provide support.
Candidates can apply by registering online at: tataelxsi.com/services/incubate/home.html
— Jatinder Singh, Assistant Editor, Light Reading India