Corporate-startup partnering in India has grown and can achieve more

In the early stages of my research on partnerships between large corporations and startups, some of my most intriguing case studies were found in Bangalore. A notable example was that of Mango, a startup incubated in IIM Bangalore’s NS Raghavan Centre for Entrepreneurial Learning (NSRCEL) which had forged a partnership with Qualcomm, the American wireless technology giant. Fast forward to present times. A few days ago Maruti Suzuki marked the conclusion of a corporate accelerator programme, conducted in partnership with IIMB’s NSRCEL, through which it engaged with a set of startups focused on technologies relevant to mobility. 

The journey from Mango to Maruti at IIMB parallels other trajectories I have observed as part of my research over the past 15 years that forms the basis of my new book, Gorillas Can Dance, on corporate-startup partnering. In the case of Microsoft, the lead case study in my book, one of the first examples of corporate-startup engagement I studied involved a Bangalore-based company called Skelta whose CEO Sanjay Shah and his team forged a parnership with Microsoft with support from a young manager, Rajiv Sodhi, who today is Microsoft India’s COO. The partnership transformed into a global relationship that facilitated the venture’s international expansion. The subsequent opening of Microsoft’s accelerator in Bangalore in 2012, with enthusiastic involvement from individuals like the then CFO Amaresh Ramaswamy, saw the corporation’s engagement with Indian startups grow in leaps and bounds.

Other MNCs followed suit. IBM engaged with startups such as Bangalore-based Stelae Technologies which became the runner-up of its global startup competition in 2015. Cisco LaunchPad, established in Bangalore in 2016, has engaged with over 50 startups over the years, several of which have gone onto to achieve considerable success. Even corporations in more traditional sectors, such as the retail company Target and SwissRe, a European reinsurance corporation, opened accelerators in Bangalore. And when the founders of the BMW Startup Garage established a global initiative called Startups Against Corona to connect innovative startups with corporations, one of the early success stories was that of Pune-based Leena AI which provided a remote work management solution to the Swiss cement giant Lafarge Holcim. 

Reflecting on these developments, three points are worth marking. First, while there are many instances of impressive corporate-startup partnering efforts in India, these have been effortful, not effortless. As I note in my book, a challenge stems from the “paradox of asymmetry” – the very differences that make corporations and startups attractive to each other also make it difficult to work together. Executives at Cisco, Microsoft, SwissRe and many other corporations have recognized this and worked hard to establish partner interfaces to address this challenge. Corporations that have begun to engage with startups more recently would do well to learn from the experiences of these veterans.

Second, there is scope for corporate-startup partnering to go beyond the established startup ecosystems like Bangalore to include locations off the beaten track. In my research at China Europe International Business School (CEIBS), I have observed that entrepreneurial efforts by local government policy makers through initiatives like smart city programmes can facilitate corporate-startup partnering even in smaller cities. More initiatives targeting smaller cities, such as Microsoft for Startups’ “Highway to a Hundred Unicorns” and efforts at Hyderabad’s T Hub to engage with entrepreneurs from other parts of the state, are in order.

Third, India offers a tremendous opportunity to enable corporate-startup partnering that helps to address the Sustainable Development Goals (SDGs). There is scope for more partnering between corporations and social enterprises, as noted in a recently report from Catalyst 2030, which tallies with my own work at the CEIBS Africa Campus in Ghana. Moreover, Indian outfit Startup Réseau’s activities in East Africa suggest that emergent ecosystems in Africa can learn from experiences in India. Going forward, green technology represents an important area for corporate-startup partnering in India to help address the global climate change challenge. 

In sum, the growth in corporate-startup partnering in India reflects the rise of sophistication on the part of both corporations and startups, as evident from last year’s unprecedented success for Indian companies like Fresh Works that went public in the US. In India, the potential for a symbiotic relationship between corporations and startups has played out not only at the level of individual partnerships, but also in terms of the co-evolution of the entrepreneurial ecosystem and the partner ecosystems of large corporations. And there is scope for corporate-startup partnering to go further, not only for economic payoff but also social impact.

Shameen Prashantham is Professor of International Business & Strategy, and Associate Dean (MBA), at China Europe International Business School. He is the author of Gorillas can Dance: Lessons from Microsoft and Other Corporations on Partnering with Startups.