WATCH: This Coimbatore-based incubator wants to Cultiv8 an ecosystem to help early-stage startups grow
India’s startup ecosystem may be booming, but there remains a significant gap between early-stage companies and investors/industry, especially in Tier II and III towns. That’s why incubators are vital, feels Kaarthick Balakrishnan, the CEO of Cultiv8, a Coimbatore-based incubator sponsored by the Indian government's Department of Science and Technology.
Watch Kaarthick and Cultiv8's Head of Strategy Sheshadri Krishnan in a conversation with YourStory here:
“I have seen great ideas, but without an ecosystem there is no way an idea can be discovered and shaped to succeed,” says Kaarthick Balakrishnan, the CEO of Cultiv8.
Kaarthick, who has completed a PhD, started as a lecturer in 2004, in Coimbatore, and eventually set up a company that works with the defence industry. In 2015, he had been an entrepreneur for almost a decade, and that’s when an idea of starting a new company struck him.
“I had met so many students and entrepreneurs. All asked me basic questions on how to start up and how to build a business. That’s when I heard through a friend about the government’s support to business incubators, and it clicked,” Kaarthick says.
What young startups need
India has as many as 80 technology business incubators (TBUs), with IIM-A being the most successful. But not all of them are as lucky. Kaarthick travelled across India and met at least 15 technology business incubators and began to study why they were not scaling up. Most had received grants and were able to set up the infrastructure, but were not able to scale the ideas of startups. Majority of the incubators he connected with “did not have business connections and therefore the failure rate of startups was high”.
Kaarthick applied to the Department of Science and Technology, and got a call to present his business case to the Chairman of the National Entrepreneurship Board in Mumbai. “I kept the idea simple. I just told them how I was going to run a profitable incubator,” he says.
The profitable incubator, as envisaged by him, would have:
- connections to industry
- a professional services ecosystem to kick-start a company
- a R&D service unit
- a co-working space
“I think they liked the fact that I had come there without any expectation and presented them with a very reasonable plan,” Kaarthick recalls.
He had, by then, convinced the Coimbatore Institute of Engineering and Technology (CIET) that they had to set up a TBU. The institute believed that a TBU association would translate into jobs and internships to their students. And Cultiv8 was born.
Kaarthick Balakrishnan's pitch about setting up a profitable incubator helped Cultiv8 win the backing of the government's Department of Science and Technology.
Connecting startups and industry
The government initially gave Rs 2.5 crore to set up Cultiv8, and subsequently offered a grant of Rs 10 crore. Of the 35 companies that have been a part of the incubator over the last three years, 20 have been seed funded while three have gone to pre-Series A. The funding in each startup is anything between Rs 20 lakh and Rs 1 crore.
The incubator also raised Rs 2.7 crore from angel investors in Coimbatore, and has tie-ups with 200 industry partners to provide startups with much-needed industry partnerships.
Cultiv8 also offers a co-working space for any company wanting to expand in to Coimbatore. It offers R&D services through CIET for software companies and startups wanting to test or build software.
In May this year, it launched an accelerator programme, where companies will be taught how to scale up. The initiative will focus on growth-oriented activities, and will include ecosystem outreach, funding, and assistance for stages beyond market validation. Eleven startups have been selected for the six-month accelerator, including AngoHealth, AskArvi, Fasal, NeoEyeD, Syntellect, Towno, and Yottasvs.
“If startups have to succeed in the country you cannot have bureaucratic processes. They need speed to market and mentoring to handle scale,” says Seshadri Krishnan, Mentor at Cultiv8.
Cultiv8 is on its way to becoming self-sustainable once its startups raise additional funding rounds. This startup from Coimbatore wants to make startups from Bharat succeed with technology-led business models. Seeding businesses that will reap rich rewards, it’s no wonder they call themselves Cultiv8.