An employee works on a laptop computer inside an office. (Photographer: David Williams/Bloomberg)

Startup Street: Why The Future Of Bengaluru’s Startup Ecosystem May Be Under Threat

This week on Startup Street, the Global Startup Genome Report 2019 explains exactly where Bengaluru’s startups need to step up. Logistics startup Blowhorn has beefed up its top leadership team as it prepares to scale up further. And India’s Commerce Ministry has prepared a startup vision document to propose it to the nations’s new government. Here’s what went on...

Where Bengaluru Needs To Step Up

India’s IT hub and startup capital Bengaluru has moved up two ranks to 18 among the world’s top 30 startups, according to the Startup Genome Report 2019. It’s the only Indian city to feature in the list.

While the city is known for its Edtech and Fintech startups, it lacks a strong framework for recognising, developing and commercialisation of intellectual property in “deep tech”, like robotics, smart cities, clean tech, autonomous systems, the report said.

“A weak policy environment in India as well as relatively low levels of research production means that Bangalore might face more challenges in deep tech startup sub-sectors — those requiring tangible IP — than it did in software,” it said. “Potentially, this might become a significant hindrance in the ecosystem, threatening its future growth.”

Another headwind is the low quality of funding. “Bangalore, Sydney, Stockholm, and Berlin stand out for their relatively low level of funding quality, driven by lack of local and experienced VCs (venture capitals) compared to other ecosystems,” the report said.

In the past, the rise of technology has happened through software, chips and the internet. The future growth of technology, however, will be more dependent on completely different innovation, the report said, adding that deep tech will be a key part.

“The next Bill Gates will not start an operating system. The next Larry Page won’t start a search engine. The next Mark Zuckerberg won’t start a social network company,” according to Peter Thiel of Founders Fund.

That, however, does not negate the startup ecosystem’s achievements. India’s education and training industry was expected to reach $101 billion in financial year 2018-19. Bengaluru’s unicorn list recently added Byju’s valued at $3.8 billion, while other startups in the space include Unacademy and Vedantu. India’s information technology sector has also seen rapid growth with the establishment and success of high tech firms in Bengaluru. They employ roughly 35 percent of India’s 2.5 million IT professionals.

Here’s the city’s scorecard out of 10, on different parameters.

  • Ecosystem Value: 4
  • Startup Output: 7
  • Startup Success: 6
  • Funding Access: 8
  • Funding Quality: 2
  • Patents: 9
  • Research: 3
  • Policy: 3
  • Scaling Experience: 4
  • Startup Experience: 9
  • Team Experience: 5
  • Talent Access, Tech: 8
  • Talent Quality, Tech: 9
  • Talent Access, Life Sciences: 2
  • Talent Quality, Life Sciences: 4
  • Talent Cost: 10
  • Infrastructure: 4
  • Global Connectedness: 7
  • Local Connectedness: 8
  • Global Market reach: 5
  • IP Commercialisation: 2
  • Local Market Reach: 7

Logistics Startup Blowhorn Beefs Up Its Leadership

Workers load sacks onto a truck at a market in Karnal, Haryana, India (Photographer: Prashanth Vishwanathan/Bloomberg)
Workers load sacks onto a truck at a market in Karnal, Haryana, India (Photographer: Prashanth Vishwanathan/Bloomberg)

Logistics startup Blowhorn added two senior management to its leadership team — Gautam Seshadri as the of head of strategy, and Santosh Desai as chief technology officer — as it prepares to scale up further.

Seshadri has more than 18 years experience in investment banking, venture capital investing, strategy and tech entrepreneurship. He was the co-founder of ZPX, a leading venture capital-funded blockchain tech startup.

Desai, on the other hand, has over 13 years of experience in designing and implementing robust, internet-scale platforms and mentoring successful and durable tech teams, the startup said in a statement.

“Gautam has been an integral part of our team since the beginning. He has been a trusted advisor to Blowhorn since 2015, and will now grow and intensify his engagement with Blowhorn,” said Mithun Srivatsa, co-founder and chief executive officer of Blowhorn. “In Santosh, we trust that our capabilities as India’s leading tech-based logistics startup will scale up to newer heights. His vast technology experience is a great fit for the futuristic tech-portfolio we are planning to build at Blowhorn to simplify logistics in the country,” he said.

Founded in August 2014, the startup is now present in Delhi-National Capital Region, Mumbai, Bengaluru, Chennai and Hyderabad. It has a team of 160 employees and last received a funding of Rs 25 crore in February 2017 from a various investors, including Unitus Seed Fund, Draper Associated and IDG Ventures.

Startups Part of Commerce Ministry’s 100-Day Programme For New Government

Measures to promote startups are part of the 100-day programme prepared by the Commerce and Industry Ministry for the new government, PTI reported quoting an official it didn’t name.

The Department for Promotion of Industry and Internal Trade has prepared a vision document to promote growth of startups and steps to further improve ease of doing business to attract both domestic and foreign investments. During April-December 2018-19, foreign direct investment into India fell 7 percent to $33.5 billion.

Results of India’s closely contested general election 2019 will be declared on May 23. While the Bharatiya Janata Party has set up a Seed Startup Fund and promised to provide collateral-free credit for entrepreneurs, among others, the Congress said it will abolish angel tax and allocate funds to promote science, technology, and innovation.