Hatch: A Services Focused Business Incubator [Founding andInsights]

By Meghna Chhabria|26th Apr 2012
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This article is part of the series called Startup Hatch, about incubators and accelerators in the startup ecosystem.

Launched 9 months ago, Hatch, a business incubator believes in what they call an Invest Mentoring engagement model. “When we invest, it’s not just about the capital we provide. We provide hands-on mentoring and guidance almost like co-promoters bringing an entire ecosystem along with it – investors, corporate connections, suppliers and service providers, government liaison, etc. We are very particular about compliance and governance. We help portfolio companies scale up to become acquisition or investment targets with front ending support and ecosystem and to be profitable with back end financial planning and process support. We are accessible 365/24/7 for all our portfolio companies,” says Founding Partner, Sudarshan Narayan.

Hatch claims to be India’s first such initiative with a pure services focus. “Right now, inIndia, there’s no broad-based services dedicated seed fund. Most seed or angel investors prefer to focus on e-commerce, technology ventures only. The GDP contribution of the services sector is 58%, yet, compared to manufacturing, there are fewer established brands with the exception of telecommunication, banking, hotels and airlines – there’s so much more to services than just this – for ex. Javed Habib’s hair salon chain is looking to raise money on capital markets and has ambitious global expansion plans. These factors, aside from the fact that all of us had a wealth of experience in the service sector inspired us to have a services focus and we want to seed fund / incubate entrepreneurs with global ambitions,” says Sudarshan.

Sudarshan
Sudarshan

Hatch also has a pure mentoring and incubation piece called BusiNest. In this, they provide office space and facilities that young businessmen can use as a launch pad. They follow an in-resident mentoring model where resident mentors (right now Hatch partners) are available for young entrepreneurs to sound off their ideas or give the right kind of advice. The aim is to help validate an idea and give it a business form. Once that’s done and the business starts, the entrepreneurs are expected to leave the nest, maybe even with funding.

Startingup and Team

“I was thinking of my own journey and the difficulties I faced and mistakes I made in my entrepreneurial stint of last 9 years. Yet, I am successful today. Could I have been successful faster and better if I had had the privilege of an experienced mentor/hands-on investor? Yes. So, I thought, how do I make the journey of other entrepreneurs easier than mine? That’s what led to Hatch. I approached KK Varma with the idea, he agreed instantly.” said Sudarshan. Apart from the two founding partners, Hatch also has Kamlesh Mehta, a senior finance professional as a financial advisor along with an eminent Advisory Board comprising stalwarts from India and USA.

KK Varma
KK Varma

An Engineer in Electronics, Sudarshan is a marketing & international business development professional with 16 years of work experience. His first venture, Clark & Kent, an 8 year old cross border executive recruitment firm, he says, has succeeded in carving a niche in a very competitive industry. KK has spent over 33 years in the advertising and mass communications industry. He was an entrepreneur at age 16.

Hatch was started with an aim to bring about a paradigm shift from trial and error in startups to trial and success. YCombinator in the US and the IIM-A incubator in India are two incubators that Hatch looks up to, in order to achieve that aim.

Investment Plans

Hatch plans to invest in 7-8 companies a year, though this year the number may be 3-4. They plan to incubate and mentor around 10 new entrepreneurs/business ideas every year with a 6 month incubation period.

“We are interested in highly scalable asset light businesses, preferably with a technology enabling play or edge, per se. We are looking at businesses in education, ITES, e-commerce, mobile, hospitality, healthcare, etc. We are also very excited about completely new services ideas that we are coming across. What we seek are new ways to do things, or new things to do,” says KK.

Insights

According to Sudarshan, the early stage investment space in India is still very small and dispersed. Awareness is low and it needs to have a structured approach. He feels that the number of really credible angels is low and exit options are limited. The talent pool available, to work for startups is also very low and that is a huge impediment. “We plan to contribute in our own small way by spreading awareness, mentoring as many as we can and offering at least a few entrepreneurs (our portfolio) the right ecosystem, support and guidance,” says Sudarshan, on how they plan to fill these gaps.

“Incubation and angel investment will increase and evolve; small city entrepreneurs will come into the fold – inclusion will happen in this sector. The ecosystem will become more structured on a regional and sectoral basis. Integration of ecosystem will happen. More number of events will create more awareness and more number of people will get attracted to startups and entrepreneurship. And we hope the government and regulators take cognizance of the importance of this space and give it the right support,” says Sudarshan, about his views on the future of the ecosystem.

Portfolio so far

Hatch’s first 2 portfolio firms are Zrii Hospitality Pvt. Ltd, a company that is launching its flagship Bakery & Diner in Bandra and First Venture Corporation Pvt Ltd, who they are currently incubating, is in the education/training arena and is starting an entrepreneur development institute that introduces young entrepreneurs to the world of business.

About e2e.

Hatch is also launching soon, an event called ‘e2e’, an occasion for young entrepreneurs to meet successful contemporary entrepreneurs, learn and earn (a surprise to be revealed in their first event) from them. They seek to make this an exciting event and a sought after one.

YourStory will closely follow Hatch’s progress and the event ‘e2e’. So, watch out this space for more!

Here’s where you can view our previous coverage on Hatch’s launch of BusiNest.

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