IIM C to Incubate 40 startups over 5 years with all new Innovation Park

The Indian Institute of Management (IIM) Calcutta has launched a new startup incubator as it looks to tap into India’s burgeoning start-up eco-system.

The incubator, IIM Calcutta Innovation Park (IIP), which has been registered as a Section 8 company under the new Companies Act, plans to host about 40 startups over five years. It will focus on five key sectors-healthcare, education, clean technology, lifestyle and analytics.

“The incubator will focus on entrepreneurial ventures developing product as well as delivery of services,” said Ashok Banerjee, dean, new initiatives and external relations, at IIM Calcutta.

Energy solutions venture ONergy, Doctors For You and primary education-focused company Edwell will be among the first batch of incubated start-ups, while two more ventures are expected to join over the next two months.

IIP will receive about 7 crore in funding from the Department of Science and Technology, which will be allocated over the same period. It also plans to raise up to 20 crore from its alumni.

IIP, which will provide seed funding of 5- 50 lakh and will acquire an equity stake of 2-5 per cent in the incubating companies. The equity will be in the form of an upfront transfer to IIP or liquidation of the stake at the time of exit from the park.

The company will operate out of an existing building at IIMC called the New Teaching Block. An area of 10,500 sq ft has been marked off which will be scaled up to 36,000 sq ft by the next 5 years. The added focus by IIP would be on Social Enterprise and East/North-East based businesses.

The Hindu Business Line reports that IIP is differentiated by its ‘learn, grow and share’ model. The programme requires businesses to go through a give-back system (through credit points) to the institute in form of student participation in projects, involvement in traineeship and placement, workshops, guest lectureship, consultancy and research opportunity for faculty etc.

There will be two arms of the Innovation Park – the Incubation Unit and the Innovation Lab. The incubation unit will be for start-ups who would be mentored by IIMC alumni and faculty towards all aspects of establishing their ventures.

The Innovation Lab could be availed by established organisation for their R&D activities or as a knowledge centre, through a credit point scheme. VCs and Angel investors could use the space at the Innovation Lab as office as this will give the incubatees better access to them and some incubatees may migrate to the Innovation Lab after the expiry of their tenure at the Incubation Unit.

The incubatees would have the option of choosing between Physical and Virtual Incubation. For Physical Incubation, the incubatee would be required to register and operate from the IIP premises, while for Virtual Incubation, the startup would be required to register with IIP but operate from their own space away from the Institute premises.

The incubatees would have a two-pronged mentorship. Each incubatee would have an IIM Calcutta Faculty Mentor who would advise in preparing Business Plan for the incubatee and also advise on Human Resources, Marketing, Finance and / or Processes and an IIM Calcutta alumni mentor who would help the incubatee in building market linkages and facilitate Angel/VC funding. The management institute counts notable entrepreneurs such as TutorVista founder Krishnan Ganesh, Rediff’s Ajit Balakrishnan and Rocket Internet-backed Jabong’s Praveen Sinha among its alumni.

The incubatees would be selected from among the top performers in national/global business plan competitions and conferences, thus creating a potential pipeline for future incubation.

The development comes at a time when private sector incubators and accelerators have taken the lead in building the country’s still-nascent startup eco-system.

“The big issue has been the overall infrastructure. Unlike in the US, our really great academic institutions are standalone ones. There is no central ecosystem yet,” said Ajit Rangnekar dean, Indian School of Business, which runs the DLabs business incubator.

Apart from ISB, IIM Ahmedabad, IIT Madras and IIT Bombay are among the handful of education institutions to have established a strong reputation in incubating startups.

IIM Ahmedabad’s Centre for Innovation, Incubation and Entrepreneurship has seeded over 100 start-ups, including traffic monitoring system Birds Eye Systems and healthcare delivery company Forus, with over 80% going on to raise external capital. “It’s been pretty dismal. Two or three institutions have done a great job, but the others have just paid lip service,” said Rajesh Sawhney, founder of GSF Accelerator, a leading start-up accelerator in the country.