Mumbai: Ankit Mehta knew he wanted to be an entrepreneur by the time he finished college. After he graduated from the Indian Institute of Technology, Bombay (IIT-B), with a dual degree in mechanical engineering in 2005, he took up a sales and marketing consultancy job he hated, “for the paisa” to support the venture he wanted to start with two of his fellow IITians.
Rahul Singh, a mechanical engineering student, and Ashish Bhat in electrical engineering, were his juniors and still in college. Despite coming from different departments and batches, the trio had worked together during various techno-fests and competitions that allowed inter-departmental collaborations, and shared apassion for building products combining their differentdisciplines.
Exactly six months later, Mehta quit his job, and the team came up with an idea of building a mechanical, instead of electrical, mobile phone charger aimed at rural areas that faced constant power outage. They turned the idea into a company called IdeaForge Technology Pvt. Ltd and were soon inducted into IIT-B’s incubation centre, the Society for Innovation and Entrepreneurship (SINE), which supports start-ups during the initial phase when they are most vulnerable, as they transform into real companies.
Productive interaction: Attendees at BarCamp, a start-up related networking event held on the IIT Bombay campus. (Photo: Ashesh Shah / Mint)
“We got a lot of help and mentoring from our professor, C. Amarnath, and getting into SINE was a smooth process,” says Mehta.
IdeaForge is one among 16 companies incubated on the sprawling Powai campus. In the last two years that it has been there, the company has built and sold a few thousand units of its chargers.
It also received Rs15 lakh government funding from the Technology Development Board and, more recently, an undisclosed funding from a clean-tech focused angel investor. It has also branched out into building small, remote-controlled air vehicles. What began as a hobby project, given the team’s penchant for mixing electronics and mechanics, won them first place at an international microair vehicle competition held at Agra’s airbase earlier this year, defeating competition from Australia, Germany and the US.
It was to encourage this blend of technology and entrepreneurship at IIT-B that SINE was formalized in 2004. Over the last four years, SINE has earned a name for itself as one of the top incubators in the country, so much so that it has now taken on the task of helping other institutes set up their own incubators by training them, based on its own experiences and learnings. Unlike its counterparts at IIT Madras or the Indian Institutes of Management (IIM) in Bangalore and Ahmedabad, SINE is not open to outsiders but is aimed at IIT-B graduates, alumni and faculty. Through this initiative, the institute wants to help commercialize research and projects into businesses. “Having these facilities makes (starting a venture) a viable option, and the IIT brand lends credibility to your business,” says Girish Saraf, whose company Vegayan Systems Pvt. Ltd is incubated on campus.
IIT-B’s incubator began as an informal programme for IT companies at the turn of the century. It offered little more than office space. Then, in 2000, at the peak of the dotcom boom, it was sponsored by two famous IIT-B alumni with an entrepreneurial bent—Infosys Technologies Ltd co-founder Nandan Nilekani and Kanwal Rekhi, Silicon Valley-based angel investor and founding father of Indo-US start-up support group The Indus Entrepreneurs.
The first batch of eight companies to be incubated during this period included eInfinitus Technologies India Pvt. Ltd, funded by Sicom Ventures and Righthalf.com, acquired by Rakesh Mathur’s Purple Yogi, Inc. But it was not until 2004 that the incubator really expanded its scope, got government funding and formalized SINE. So far, the institute has incubated 32 companies, 14 of which have successfully made their way out of incubation, including and mobile solutions company Myzus Pvt. Ltd and enterprise products firm Herald Logic Pvt. Ltd.
SINE is run as a not-for-profit organization chaired by the director of IIT-B, and its board comprises an equal number of faculty and industry members, including Seedfund managing partner Pravin Gandhi and Mastek Ltd chairman and managing director Ashank Desai.
The board reviews and processes applications, but the incubator’s three-member faculty begins informal interactions with potential candidates early on. “Often, students and faculty who are thinking of setting up a venture interact with us almost a year in advance. We help them write the business plan and guide them on various aspects of starting out,” says Poyni Bhatt, chief administrative officer, SINE. It has a pipeline of about seven companies currently under consideration. The induction itself is a quick process, and takes six-eight weeks from the time of application. The institute takes 5-10% stake in the company, which it liquidates when later funding comes in.
Companies can stay on the campus for a maximum of three years.
Besides office space at discounted rates (Rs50 per sq. ft), incubatees also have access to SINE’s network of industry contacts. It has formal arrangements with the Delhi-based India Angel Network and often works on programmes with corporates such as Tata Consultancy Services Ltd, British Petroleum Plc. and industry associations such as National Association of Software and Service Companies, or Nasscom.
It is one of the few incubators managed by someone from an industry background rather than an academician. Sushanto Mitra, SINE’s chief executive officer, was an investment banker for several years before he took on his current role six months ago, because he “wanted to do something more exciting and help entrepreneurs”. SINE also selectively funds start-ups, with government grants at its disposal from the department of science and technology.
Additionally, more than half the incubated companies have received angel funding either from high net worth individuals or angel networks. This includes Vegayan Systems, which received funding from serial entrepreneur and IIT-B alumnus Rakesh Mathur, and TRI Technosolutions Pvt. Ltd, which was funded by Mumbai-based Seedfund. “VCs (venture capitalists) like to visit the campus, because it is a one-stop shop where they can find 16 companies in one place and interact with them informally,” says Mitra.
Of the 16 companies present, about half have been started by faculty and the rest by former students. In some cases, it is a combination of faculty and students. Several faculty members at IIT-B hold PhDs and specialize in one aspect of their discipline. Here, they can further their research and even turn it into a business.
This gives students, too, an opportunity to work closely with faculty on such projects and it often leads to collaborative efforts. Take, for example, Iken Technologies, a company promoted by R.M. Sonar, who teaches at IIT-B’s SJM School of Management. Iken, born out of Sonar’s PhD research, combines artificial intelligence techniques to make business applications more intuitive when dealing with customers. Students who worked with Sonar on early projects submitted it in the form of a business plan at Eureka, the institute’s premier B-plan contest in 2005, and came fourth.
“It gave us a sense of validation, so we could take it to the next level and form a business,” says Sonar.
Often, students end up joining the start-up, too. Three of Vegayan’s 16-member team are graduates from the institute. In addition to the incubation, the institute encourages entrepreneurship through a number of initiatives. Eureka, the annual B-plan showcase that was started in 1999, has led to the creation of 18 start-ups which were either winners or runners-up at the contest. Myzus and Herald Logic were the early discoveries of Eureka. This year’s winners Eight Point Systems, an IIT-B duo with an idea of building arcade gaming machines, won angel funding on the spot from mentor Vishal Gondal, CEO, Indiagames Pvt. Ltd. The team is now talking to SINE for incubation.
For technologies that cannot sustain themselves as stand-alone businesses, the institute helps with filing patents and licensing the technology to corporates, allowing developers to retain 70% of the licence fees.
An important contributor to the start-up spirit is the institute’s student body, the Entrepreneurship Cell, or eCell. This is in charge of all entrepreneurship-related activities at the institute, which includes annual events such as Ideaz, a competition for the best ideas, Eureka, the B-plan contest and E-Summit, a day-long event with seminars and demos that attracted 1,200 people this year.
A significant initiative by eCell was the formation of the IIT-B alumni network called the Global Entrepreneurship Network (GEN), which offers a resource pool that start-ups can tap into.
Members of eCell interact extensively with the start-ups on campus, students looking to start a venture and with industry folks. Of late, start-up related networking events such as BarCamps have also been hosted on campus, leading to more exposure to the start-up culture than before.