“We plan to accelerate 100 startups in the next 3 years”Tanvi Rangwala, Director – iAccelerator, CIIE
Indian Institute of Management, Ahmedabad, an institute of worldwide renown, has a Centre for Innovative Incubation and Entrepreneurship (CIIE). This centre runs the iAccelerator program for internet and mobile startups. The program is designed to provide startups with mentoring, funding and infrastructure support over a period of three months which ends with a Demo Day wherein all the startups pitch their improved business plans to investors.
iAccelerator was started in 2009 and is India’s first such accelerator program for Internet & Mobile startups. Since its inception, the program has supported 26 startups. Over the years, iAccelerator team has consolidated its structure and is now ready to scale it up. The Center aspires to support 100 startups in coming three years by doing 5 batches of iAccelerator program.
The Need for an Accelerator
In this ‘internet age’, a computer with a net connection is enough to start up a potentially multi-million dollar company. Typically, the first year in a life of an Internet or Mobile startup is the most crucial and revolves around launching the product and growing user base (In some cases, even proving one or two ways of generating revenue for the given model). If the startup successfully does this, then it’s all set. There are good number of angels, seed funds and early stage VCs in the country to support a startup at this point. But many great ideas backed by great teams do not survive the most critical first year. Right infrastructure, business mentoring and funding can change future of these startups and increase their chances of success. It is realized that Accelerators and Incubators are pivotal for creating successful entrepreneurial ecosystem in any country. Countries like USA and China has more than 5000 such entities each whereas India has less than a 100! As more and more technology and management graduates and professionals are opting out to startup on their own, such Accelerators will play a key role in increasing their chances at success.
Having nurtured three batches of startups till now with an average batch size of 9, iAccelerator has built a brand name for itself. TanviRangwala, who leads the iAccelerator program at CIIE, provided the numbers for the analysis:
Total startups: 26
Received Funding / Generating Revenue: 8
“We evaluated 300+ applications - 9 startups from India and 2 from Germany got selected for iA 2011 batch. Number of applications received each year is growing at more than 100% YoY.” says Tanvi.
Other interesting trend is the experience of teams that apply. iAccelerator 2011 had good mix of teams with years of professional experience ranging from 0-10. Most of these startups came on board with either product or prototype in place. The scope has also widened; 4 startups in the 2011 batch target the global audience.
Out of this bunch, two startups shut down and a couple of others haven’t yet settled into a stable business model but this is a part and parcel of starting up. And looking at this ratio, iAccelerator has had a strong success rate.
Basis on which a team is selected:
- The team is the most important pillar
- Value proposition
- Sustainable competitive advantage
- Scalable business model.
Each of the startups is given a capital of 5 lakhs to start out with and develop their product/service. iAccelerator takes a 3-12% stake in the company.
From the other side of the table, the entrepreneurs moving into the program also had some interesting things to say. Mentoring and working together with other teams were the two main points that were brought to the fore as advantages of the iAccelerator programs. The only drawback that can be taken out is the location as Ahmedabad is not a startup hub yet and it can be difficult to find technical talent for mobile and internet companies here (design talent is in plenty because of NID). But this drawback is almost balanced by the IIM-A brand which is more than sufficient to draw any talent from India.
As for the mentors,
iAccelerator has filled a critical gap in the incubation part of the Indian entrepreneurship eco-system by providing an intense and high-quality residential program for a handpicked set of entrepreneurs. This model has worked extremely well in the Silicon Valley, and iAccelerator is now taking the lead in establishing a robust incubation environment in India. As a VC mentor in the initiative, I look forward to several high potential startups graduating from the program over the coming years.
-Soumitra Sharma, IDG
iAccelerator is a great platform for entrepreneurial talent to find their feet and wings. The incubation facilities, resources, team, network, and brand of the CIIE and IIM-A offer the much needed competitive advantage that every fledgling venture needs.
-Shirish Andhare, BroadSoft
- The program leverages Center’s other initiatives such as mentorEdge and IIMAngeles and institutes’ network to provide best possible mentoring and connections for its startups.
- The program works in partnership with technology corporations to provide infrastructure, industry and technology expertise.
- A growing mentor and investor network- During iA2011, startups interacted with 25+ mentors and 40+ investors.
- One third of its startups have either received subsequent round of funding or growing using revenue.
The number of startups per batch is slated to go up to 15 this year onwards. “This number would increase and the program plans to accelerate 100 startups in the coming 3 years with 5 batches.” informs Tanvi. The entries for 2012 are planned to open up on 1st June, 2012 and startups interested in applying can do so on the website.
Check out our previous coverage about the program here to see a list of the 11 iA2011 startups.