Startup Street: Is India Ready To Benefit From Innovation?
This week on Startup Street—a joint report by an Indian and a European Union organisation shows that India’s ability to benefit from innovation is “weak”. As agri-tech startups take the country by storm, one company wants to solve India’s egg imbalance. Also, you’ll soon be able to list your startup on the BSE if it meets certain criteria. Read on…
India Lags Where It Matters
India, the world’s third-largest startup ecosystem, moved six places up in the Global Innovation Index rankings in 2017, boosted by efforts to become an economy led by innovation.
But is it ready to reap the benefits from this technological transition? It seems not.
India’s global ranking in the ‘Networked Readiness Index’ dropped to 91 in 2016 from 69 in 2013, according to a report co-authored by the European Business & Technology Centre and the Indian Council for Research on International Economic Relations.
The index compares countries’ positions over the years in terms of political and regulatory environment, infrastructure and digital content, environment for information and communication technology, tariffs and skills.
Though this does not indicate that India’s position is deteriorating, it does mean that the country isn’t improving its readiness compared to other countries, the report said.
While presenting the joint paper in New Delhi this week, Minister Counsellor in Delegation of EU to India Tania Friederichs called India’s ranking “weak”.
Friederichs, according to a PTI report, said there was hardly any innovation possible without investment in research, and in India investment in this field is just 0.79 percent of gross domestic product compared to around 4 percent invested by countries like Sweden, Denmark and Finland.
She said India was evolving very fast in terms of startup ecosystem, an important element of innovation ecosystem. The report, however, pointed out that though the country has introduced a number of policy initiatives, there remains some challenges.
Authors’ discussions with European companies show that one of the key reasons that the Make in India initiative has not taken off is because it is not linked with other initiatives such as Startup India, the report said. Unlike other countries, India does not have any policies to attract foreign startups. Other issues include low technology penetration in rural areas, quality of communication and broadband services and skill shortage.
Also read: The Startups Waging War Against Superbugs
This Startup Wants To Solve North India’s Egg Problem
Three crore eggs travel everyday from South India, which holds 70 percent of the nation’s production, to Bihar in North India, says startup owner Abheshek Negi, explaining why he entered the business. Even with all of India’s production, the demand is three times what the country’s poultry business can supply, he says.
In that lies an opportunity for his less-than-a year-old startup—Eggoz, which is also trying to produce more nutritious eggs in the populous and malnourished states of Bihar and Madhya Pradesh.
Eggoz started its journey in Bihar Sharif, a tier-III town, with a 12,000 bird farm late last year. It then expanded into Madhya Pradesh and now holds one lakh birds, Negi told BloombergQuint.
“We use algorithms which track a combination of different factors like a bird’s age, the climate, the season, etc., to tell us what the feed should consist of,” Negi said. The startup produces its own feed—mostly of maize and soy—in collaboration with local farmers that allows them to produce healthier eggs on a per-feed cost, lower than the industry average, he said.
Negi’s Eggoz is one of the many agri-tech startups that are storming India’s ecosystem.
Startups see the problems facing India’s agricultural sector as an opportunity for growth, according to a Nikkei Asian Review report on agri-tech startups, published earlier this month. “India has over 600 million farmers, along with quadruple the farmland of Japan”, with a growing population and a growing demand for food, the report said.
“I truly believe India will be the centre of agri-food tech innovation and am very excited,” Japanese entrepreneur Taizo Son said in the report. Son is the brother of Softbank’s Masayoshi Son.
Eggoz has raised Rs 1.2 crore from a clutch of angel investors. The funds will be used to expand its capacity in Bihar, Negi said.
What You Need To Get Your Startup Listed
The BSE this week will launch a platform for new-age companies to boost the country’s startup ecosystem.
The platform, scheduled to be launched on July 9, will facilitate the listing of companies in sectors like information technology, ITeS, bio-technology and life sciences, 3D printing, space technology and e-commerce, the bourse’s notification said.
But startups need to follow certain rules to list here.
- The company needs to have a pre-issue, paid-up equity share capital of minimum Rs 1 crore.
- The company needs to have been in existence for at least three years.
- The company should have a positive net worth.
- It should preferably have investment by qualified institutional buyers or angel investors for a minimum of two years at the time of filing the draft prospectus. This investment should be of at least Rs 1 crore.
- The company should not have been referred to the National Company Law Tribunal under the Insolvency and Bankruptcy Code and there should be no winding up petition against the company that has been accepted by the NCLT.
- In regards with disclosures and migration to the main board, regulation applicable to the bourse’s small and medium enterprises will apply on the startup.
The National Stock Exchange, the country’s largest bourse, also has a platform called Emerge ITP where startups can get listed with or without an initial public offer. However, only 11 startups have listed on it so far.