Startups like fashion jewellery brand Ornativa struggle for lack of startup ecosystem in Kolkata

Hailing from a traditional Bengali family, Suptotthita Neogi along with Nabarun Chakrabortty started fashion jewellery brand Ornativa.com in March 2014 in Kolkata where entrepreneurship is not a preferred career option. Brought up in a conservative Bengali family, quitting a good job to start a business was a big challenge. But she always wanted to start her own venture and used to participate in entrepreneurial workshops and seminars when she was a student.

However, the duo was not prepared for the stark reality of entrepreneurship. They were repeatedly rejected by the investors at the time of setting up their venture. The majority shy away from investing in Kolkata startups due to the lack of proper ecosystem, technology talent, skilled workforce, stereotyped behavior, political paralysis and pessimistic mindset.

Suptotthita says, “The investors asked us to go to Bengaluru, Mumbai, or Delhi so that they can invest in our company. Everybody told us to shut it down as running a business with your hard-earned money is not a good idea. My co-founder and I invested Rs 10 lakh from our personal savings making us bankrupt. Then Nabarun got back to his job to support the company.”

However, Fortune smiled on them and they got selected for ‘IBM Catalyst Program’, ISDI Creative Accelerator powered by Microsoft Ventures and ‘Microsoft Bizspark’.

IBM Catalyst offers one-year’s worth of free cloud computing services, USD 1,000 credit each month and 24/7 technical support to the startup. Microsoft Bizspark gives three years of free software services, tech support, and Azure cloud.

Suptotthita states that the six-month programme of ISDI Creative Accelerator will provide office space, business and technology mentoring, Microsoft software, executive and operational support and access to funding.

This much-needed help has enabled the startup gain 700 orders per month. Apart from their own brand Ornativa.com, the duo also started selling jewellery through more than 25 e-commerce sites like Snapdeal, Paytm, Shopclues, and Fashionara etc.

Nabarun says, “Our business is growing 60 per cent month on month and we shipped more than 1,000 units in August with an average order value of Rs 750.”

Nabarun manages the product development, manufacturing, design, operation and business development related work. Currently, the startup has a team of eight members.

Ornativa clocked a revenue of Rs 12 lakh last year and it is targeting Rs five crore for the next fiscal year. The startup is also expected to reach more than 10,000 orders per month, work with 3D printing technology and setup a manufacturing unit within the next two years.

To know more about the staggering Kolkata startup ecosystem, Yourstory spoke to some of the investors and startups.

Why Kolkata ecosystem is lagging behind

The magnitude of the startup boom in Kolkata has been quite restricted compared to other cities like Bengaluru, Delhi, Mumbai, Hyderabad, and Pune. The staggering ecosystem of the city has a tight chokehold on growth, innovation and progress. This has forced a chunk of the young population leave the city for better opportunities in education, career, and entrepreneurship.

Srikrishna Ramamoorthy, Partner, Unitus Seed Fund, says, “Due to large number of technology companies and other knowledge-driven industries, cities like Bengaluru, Delhi and Hyderabad have attracted a pool of talent resources. And it has taken longer for that to happen in Kolkata and the eastern region in general. Moreover, Kolkata so far, has not seen huge number of success stories.”

The key challenge is to keep the young guns of the city stay back in Kolkata to pursue their entrepreneurial dream. But today, startups in Kolkata seem to be very optimistic with Unitus Seed Fund, Indian Angel Network, Calcutta Angels, NASSCOM, and TiE aggressively working towards elevating the ecosystem. A handful of startups have lately managed to raise money from investors.

With a USD 16-million valuation, Kolkata food retail chain Wow! Momo raised Rs 10 crore from Indian Angel Network. Price discovery startup Buyhatke raised USD one million from Kris Gopalkrishnan and Japanese e-commerce and investment company BEENOS; online fashion store Fashionove raised angel funding from cricketer Umesh Yadav; Bengal Speech & Hearing have raised about Rs 20 crore from Matrix Partners and EasyCoach has recently raised an undisclosed amount from a city-based angel Investor.

Sagar Daryani, Co-founder, Wow! Momo, says, “Since few fundings have been successfully executed in Kolkata, not many entrepreneurs know how to pitch a business plan or idea. Lack of mentoring and strong association among entrepreneurs prevails. The government, too, has not been able to market the fact that it is pro business.”

Saurabh Srivastava, Co-founder, Indian Angel Network, says, “Investors are driven by technology startups and most of the attention was divided between Bengaluru, Mumbai, and Delhi. But we are getting to see young enthusiasts eager to pitch their ideas and attract investor attention. IAN has made one investment already in a city-based startup and is looking at investing in two more by the end of this year.”

Sunil K. Goyal, ‎Founder & CEO, YourNest Angel Fund, says, “Kolkata has an active angel group of young and energetic HNIs who are constantly looking for ideas. Though Kolkata-based startups are reaching out to us to seek funding, the number is too small to talk about. The city is encouraging incubation centres of engineering colleges and management institutions from across West Bengal to participate in startup events at Kolkata.”

Things need to be done to elevate the Kolkata Startup ecosystem

Investors are of the view that startup events, knowledge sessions, entrepreneur/VC meet-ups will help boost the Kolkata startup ecosystem. Investor networks should regularly hold sessions for these budding entrepreneurs and give them a proper platform to present themselves. Moreover, popular B-schools should organise regular seminars and interactive sessions to encourage more students to take up entrepreneurship.

Prajakt Raut, Founder, Hub for Startups, says, “Creating smaller, informal angel investor groups to provide early-stage capital to high-potential startups will help. Such informal groups can outsource their operations management thus allowing volunteer investors members to run a successful platform. Investors will invest wherever there is a good business case and potential opportunity for them to get returns. What we need is forums to curate and showcase startups from the region.”

Sunil from YourNest Angel states that the members of companies like Cisco, Tech Mahendra, Infosys, Airtel, and HCL Tech will add a lot of weight by becoming active mentors through TiE or Kolkata Angels. This will help B2B startups co-create offerings for early success and B2C startups get inputs on scaling up.

When an entrepreneur starts a new venture, he/she is absolutely unaware of the procedure of legalities, compliances and formalities. Therefore, the government has to play a crucial role in creating a favorable business environment and initiate awareness programmes.

Sagar from Wow! Momo has highlighted some of the initiatives which need to be taken:

• A new startup committee should be introduced by the government and startups should be registered under this body.
• A period of three years can be set as a concession to be provided to startups where compliance is less and charges are subsidised for obtaining compliance required for running a business for the first three years.
• One-window licensing for startups which should be issued by the above mentioned body after a proper inspection and analysis of idea and location.
• Every startup in the State should be given a mentoring session, explaining in brief the curtailed compliances and its effective implementation, with a handbook mentioning all the guidelines for reference. This should be mandatory for every startup both established and registered.

Tanushree Khandelwal, Co-Founder and Director, Fashionove.com, says, “It is very important to bring Kolkata startups into the limelight and encourage more people to start up. More meet-ups with leading startup founders and investors would also be of great help.”