Techstars wants to play a meaningful role in India’s start-up ecosystem: co-founders
Bengaluru: On Thursday, global start-up incubator network Techstars announced the launch of its Indian operations. As part of the launch, Techstars has forged a joint venture with ANSR Consulting, a Bangalore-based start-up which counts Accel Partners and Infosys as investors and helps large Fortune 500 companies like Limited Brands and Target set up their technology centres in India. In an interview, Techstars co-founders David Cohen and David Brown spoke about their decision to launch in India, the kind of start-ups Techstars wants to back and the current immigration environment in the US. Edited excerpts:
What were some of the triggers for your decision to launch in India?
Cohen: When we talk about Techstars, we think of it as this worldwide network that helps entrepreneurs succeed. We think there’s a gap in that worldwide network and we do have activities here (in India) already, but we really want to bring the whole portfolio of what Techstars does to India. In that network, there are three pieces that we think about—there’s our start-up programme, (Start-up Weekend, etc), but we don’t have any investing activity beyond that sort of community development activity. I think we’ve been seeing for a long time, great companies being born here. Some are able to come to our US programmes that we have for acceleration and investment, but I think we want to play a more meaningful role in what’s emerging here and what’s so exciting about this ecosystem. We want to bring more structure and rigour around the start-up programmes that we do already, add the investment pieces around the accelerator and hopefully also venture capital that we also do elsewhere. We really want to invest in our presence here.
Brown: I think it was about time. I think the Indian ecosystem has certainly been growing for quite sometime. We’ve seen great companies come through the European and the US accelerators —it’s a long way for us. It’s culturally different and it’s important for us to have a partner like ANSR to help us navigate the local ecosystem. The ‘why now’ comes down to finding the right partner, which we have now done.
What kind of programmes will you launch here? Globally you have corporate accelerator programmes with companies like Walt Disney, Comcast and Barclays. Will you adopt a similar approach here?
Brown: Yeah, likely. I think the concept in India is much broader than just having a single accelerator with a particular corporate partner. It’s about really bringing a complete presence. So, integrating start-up programme into a start-up accelerators into investing is one thing—part of that will likely be similar types of programmes here in India.
Techstars has city-based programmes in places like New York and Paris. Will you look to follow a similar model in India?
Brown: Absolutely. We are looking at a number of different opportunities from India and we’ll likely execute on some or all of them. And that includes the city model, which is the original Techstars Boulder model, which includes the corporate programme, it involves more top-of-the-funnel activities like Start-up Week and Start-up Weekend and it involves corporates, who want to plug into the start-up ecosystem to the benefit of both parties.
As part of the Techstars network, will Indian start-ups have access to other investors and corporations across the world?
Brown: It’s not just about connecting Indian start-ups to the rest of the world. It’s also about connecting the rest of the world to India and the corporations based here.
Cohen: We have big companies that want to do business here. They want to come here and integrate with the community and I think we’ll be able to help them more.
What are some of the areas that you typically like to invest in?
Cohen: We’re pretty broad as investors. Our thesis is work with great entrepreneurs that believe they can change the world. But there are specific areas that we get excited about—areas like hard tech, deep tech, companies that deal with really difficult technology, etc.
What is the typical hit rate in your accelerator batches?
Cohen: The hit rate of Series-A start-ups in the US is typically around 35%. If you go through a Techstars accelerator, about a third or more are going to get a $5-million round. It tends to break into thirds. A third are going to have that shot at being really big, a third are going to be interesting but will take some time, and the other third are not going to work. That’s typically what we see....So, typically the hit rate is around 35%.
The current immigration environment in the US is pretty alarming for global entrepreneurs who want to build companies in the US. How do you get around that?
Brown: It’s horrible. It couldn’t be worse. I’m from Canada and I moved to the United States and I describe myself as an immigrant entrepreneur as well. I was lucky that I felt welcome and accepted and I feel terrible for entrepreneurs who want to come to the US, build great businesses and feel rejected.
Cohen: I think it’s going to lead to more companies hiring people and building great things in other places. That’s a shame for the US. It’s a huge loss, but an opportunity for everyone else.
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