The expanded startup accelerator programme will cater to segments beyond finance, and give startups the opportunity to scale their operations.
Private sector lender YES Bank first launched its fintech accelerator programme in January, 2017, but the success of the programme has led the bank to extend its programme to startups that are in non-banking sectors.
“This was something which was running on the back of our minds. Just because we cannot consume it would not mean that we could not meaningfully engage with them,” says Amit Shah, country head, corporate strategy, YES Bank.
He says that with growing digitalisation, there is a new paradigm in banking, where banks’ activities go beyond just financial transactions, and include providing various kinds of advisory services.
YES Bank also realised it could take innovative startups to its clients to solve their business problems as often, the clients did not have access to startups.
YES Bank’s expanded accelerator programme is called YES Scale, and is focused on five verticals – smart cities, cleantech, agritech, life sciences and edutech. In the first phase, the bank is focusing on smart cities, agritech and cleantech.
Amit says, “The five segments are the knowledge sectors and we have deep expertise in these areas.” The bank has been actively financing in the areas of cleantech and agriculture.
YES Bank Managing Director and CEO Rana Kapoor says, “India is currently the second most attractive renewable energy market in the world and fourth in terms of renewable energy investments. With the rise of the startup economy, the Indian market is all set to disrupt and redefine the contours of the clean technology sector, in line with Government of India’s vision.”
Connecting the dots
As part of the YES Scale accelerator programme, the bank brings together startups, clients and technology providers. It also provides a grant of up to Rs 20 lakh to startups with the core focus being to take them to the market in 15-weeks’ time. Besides, it also provides access to funding of up to $1 million through various investment partners.
The grant provided by YES Bank is part of an insight it gained from a detailed study on the opportunities in the India fintech sector, where it found that 80-85 percent of the startups struggle to get off the mark as they do not get funding for their proof of concept (PoC). The grant from YES Bank enables these startups to complete their PoC.
“Startups have a solution which is yet to implemented, and we have clients who have agreed to work with them to solve their real-life problems,” says Amit. The startups in the programme will undergo an intensive 14-week curriculum where the focus is to create market viability of their products.
The bank has an exhaustive database of startups in its chosen segments and it plans to select around 15-20 in each segment. Among the startups, the bank is looking at those that are still in the early stages.
YES Bank has partnered with Dell and Robert Bosch for its smart city segment, whereas ITC, Nestle, MTR, and Bigbasket will be part of its agritech programme.
The lender has set aside Rs 4 crore for the accelerator, of which Rs 3 crore will be given in form of grants. The bank is confident of getting the right quality of startups for the YES Scale progamme. As part of its fintech accelerator programme, it had received applications from 750 companies across 18 countries in the first phase.
The YES Scale accelerator programme has taken learnings from the bank’s fintech accelerator. Amit says, “In the year one, we thought we will bring a lot of international deep tech into India, but realised that these startups do not understand the unit economics of the country.”
He opines that India is a country where there is scale and volume, but it comes at a low margin. The other important learning was that as a financial institution, YES Bank needed to be conservative on how it engaged with startups, especially those dealing with sensitive financial data. “We do not want to do things in a hurry, and have our own processes in risk management which encompasses areas such as information security, application and compliance,” says Amit.