 "Mukund Mohan")
Recently, Microsoft Ventures Accelerator India announced a list of 16 technology start-ups for its fifth batch. The early-to-middle-stage accelerator is focused on themes such as smart cloud services, mobile applications, urban informatics and big data, internet of things and wearable computing. Mukund Mohan, director of Microsoft Ventures, talks to Itika Sharma Punit about how the entity selects start-ups to incubate and the trends among Indian start-ups. Edited excerpts:
How has MS Accelerator's journey in India been so far?
The accelerator has been in India for about a year and a half. So far, we have had 56 companies. Of these, about three have shut, 21 have raised series-A funding and 82 per cent have raised funding of some sort. We have also had two acquisitions.
Also Read
What are the technology trends in the start-up space?
When we started, of the 240-odd applicants we had, about 30 per cent were e-commerce companies. So, that was pretty hot at that time. In the second batch, we had two major categories - travel and related companies and car pooling. In the third, we saw a lot of education-related start-ups. The fourth batch is a little more balanced; we saw a mix of software-as-a-service (SaaS) companies and cloud and big data companies. Also, we now see a lot of niche companies in education.
In our first batch, 63 per cent of the companies were focused on consumer-oriented businesses. By the fourth, this fell to 50 per cent.
What are the themes at MS Accelerator?
We do not have a fixed number of companies in each batch. But there are themes we like to focus on - five major themes and two minor ones. These are our themes globally, not just in India. The major themes are smart cloud services, mobile applications, urban informatics and big data, internet of things and wearable computing. The two minor themes, the ones we do focus a lot on, are robotics and home-automation. These themes have been around for the last six-eight months. Before that, the themes were a lot more here-and-now ones such as SaaS, cloud infrastructure, mobile, consumer internet. Now, we've become more specific.
What is the primary criterion for choosing a start-up over another?
For every batch, we get 800-1,000 applications. One thing is clear - for us, the team matters a lot more than the problem it is solving. We believe at our stage, where we often have companies that are still at pre-product stages, the team is all that matters.
We personally look for qualities in the team and based on that, we bring the 800-1,000 applicants down to 50-100. Then, we talk to the entrepreneurs to find out how well they can collaborate or attract talent, after which we call 20-30 to meet us for two days.
On the selection panel, we have two people from the accelerator, one from the Microsoft research team, one from the Microsoft sales team, two from the investor community and two entrepreneurs who can mentor our teams. From the next batch, we will also include one or two of our alumni to share their experiences.
What is the start-up ecosystem in India like?
In places such as Palo Alto and Mountain View (both in the US), every third person talks about a start-up. We are far from that. When you look at the number of people graduating from technology schools and colleges in India every year, we should be producing five times the current number; we should be dwarfing Silicon Valley. So, the ecosystem has to improve a lot more. From a maturity-cycle perspective, Silicon Valley has had product start-ups for the last 60 years, while Israel has had these for the past 30 years. We have had these only for the last seven-10 years. So, we can't act like those that are much older. As an ecosystem, ours is still very young, but we are still ahead of many others. We are on the right path and we will get there soon.
Some believe there's a start-up bubble in India.
Some indicators say we are not even close to a bubble, while others say we are in a bubble. The unfortunate part is we won't know until two years. What indicates there could be a bubble is the number of people applying to start-up-related accelerators or incubators. On an average, we got 300 applications three years ago; now, we are getting 4,000. That's a lot. Another indicator of a bubble would be the number of people starting early-stage funds. India had three; now, we have 27.
Also, there is the factor of how quickly companies shut - people try an idea for 15 days to three months and then do away with it. That indicates this could be a bubble. But there are indicators that say there's no bubble. For instance, it is still hard to raise money in India.
