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While IIT Bombay is planning to expand its business incubator SINE (Society for Innovation and Entrepreneurship) by three times, IIT Kanpur is also doing the same and expanding capacity of its incubator to house 100 incubators, up from 33. IIT Madras plans to add more built-up space to cater to more entrepreneurs.
“We are planning to increase the capacity at SINE threefold. The benefits through innovation are very large to the economy and our main interest is to nurture the incubator and entrepreneurs,” said Devang Khakhar, director, IIT Bombay.
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INCUBATION HUB IITs look beyond investing in tech-based companies |
IIT Bombay
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Currently, SINE has around 18 companies incubating. Tripling the capacity means taking it up to 54. SINE provides subsidised infrastructure to the companies incubating on campus. These include fully furnished offices at a nominal cost, personal computers, printers, telecom facilities and internet connectivity. Entrepreneurs are also extended business and mentoring support along with access to professionals with legal, financial, accounting, IP, and industry expertise.
SINE, which traditionally believed in investing only in technology-based companies, is now warming up to companies in other segments, too. SINE, which has annual revenue of Rs 70 lakh to Rs 1 crore, is part of IIT Bombay and a financially independent entity. IIT Bombay picks up 3 per cent stake in the start-ups and dilutes one-third of the same when the start-ups raise funds.
At IIT Kanpur, SIDBI Innovation and Incubation Centre (SIIC) was started in 2000 in collaboration with Small Industries Development Bank of India (SIDBI) to foster innovation, research and entrepreneurial activities in technology-related areas.
The centre is constructing a new building which will have at least a 100 companies incubating against the present 30. The centre receives almost five applications every month with new business ideas.
"We have at least 33 companies graduating and 33 companies incubating any given year. That number will go up post-expansion," said Professor B V Phani, associate dean, innovation and incubation. Unlike other IITs, IIT Kanpur allows non-IITians to approach it with a viable business idea and provides them with the facilities to incubate.
If it’s a student, the institute picks up three per cent stake in the venture though there is no revenue sharing. The institute provides the entrepreneur with a mentor who is allowed to pick up 17 per cent stake in the start-up.
If the start-up is by a faculty member, the institute picks up 13 per cent stake in the venture. “Faculty members have access to various resources on campus. So, the stake that we pick up in their ventures is higher,” adds Phani. IIT Kanpur helps students with seed funding to the tune of Rs 25 lakh.
IIT Kanpur has seen a few of its companies being acquired by larger companies. For instance, its start-up, GeoKno, was acquired by GMR two years ago. The institute provides the start-ups with subsidised services, charging them every quarter. “We wait till the start-ups begin making money,” adds Phani.
At present IIT Kanpur holds equity in about 40 companies and says the valuation of the same could be around Rs 30-40 crore. The money IIT Kanpur realises through the sale of its equity is ploughed back into the corpus. Currently, it holds a corpus of Rs 10 crore.
At IIT Madras, the IIT-M Research Park in Chennai not only invites leading companies to establish their research centres but also houses incubators and start-ups. It currently has around 30 to 40 companies incubating and expects to house 150 companies in the next five years.
However, some companies incubating at these institutes want the IITs to be more adapting to the current changes. An entrepreneur at SINE says the facilities provided are good but very limited. “SINE provides us with 16 chairs for our staff. If you wish to expand beyond that, you have to seek approvals. That is a very bureaucratic way of working. Any company with a valid business proposition will grow beyond 16 staff members in three years. Housing.com, though a company set up by IIT alumni, has grown beyond 100 employees in less than three years. SINE has to be more prudent and consider such aspects.”
With the ecosystem evolving from the perspective of the society, investors and academics, a lot of students are willing to take risks. A lack of parental and societal pressure is also allowing students to experiment with their ideas. In such a case, the IITs say they are only providing the entrepreneurs the support they need.
