With many multinational giants partnering with start-ups to leverage their technology solutions in the market; corporate incubation and accelerator programmes have started to take the centre stage in the last few years. However, the Indian start-up ecosystem still remains to be ripe. There still are a lot of gaps that need to be filled in this market!
To capitalise in this market, and to help the start-ups with their desired needs, SAP too joined the likes of Microsoft, Oracle, etc., and recently launched SAP Start-up Studio!
What is SAP Start-up Studio?
Founded in April 1972, SAP SE (Systems, Applications & Products in Data Processing) is a German software corporation that develops enterprise software that helps businesses to manage their operations and customer relations effectively. With regional offices spread across 130 countries, 293,500 customers spread across 190 countries, revenues worth €20+ Billion and 76,986 employees; SAP is the world’s largest business software company and the third-biggest independent software provider by revenue.
Their offerings include: Business Solutions, Industry Solutions, Solutions for Small and Midsize Enterprises, Platforms and frameworks, Legacy Platforms and many others, that include products like ––– Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), Supply Chain Management (SCM), Supplier Relationship Management (SRM), that
This German software maker has recently launched their first 12-month accelerator programme called – SAP Start-up Studio and has picked Bangalore for its first start-up incubation centre. SAP has invested about $50 Mn (₹380 crores) in the facility
This SAP Start-up Studio at SAP Labs campus in Whitefield (Bangalore) will include a 75-seat incubator that would mainly be focused on nurturing early/disruptive stage start-ups within the domains of Internet of Things (IoT), Big Data, Cloud, along with verticals in retail and healthcare.
Their offerings would include financial assistance, access to space, technology, infrastructure, mentoring and business consulting, to early stage start-ups.
With an end goal of fine-tuning the business of these start-ups and take them to their next stage of growth ––– every year SAP would take around 10 start-ups, provide them with the needed tools and resources and then give them access to the large base of SAP customers where appropriate.
The companies that have an idea or early prototype will be eligible to become a part of the programme and would be provided with guidance and support in building their business also by giving them access to SAP’s huge ecosystem of customers and partners. If required, SAP may also take an equity position in the company as well.
Which companies have been selected for the accelerator programme?
As of date – seven companies have been selected for the accelerator programme and have also received an undisclosed amount in funding.
These companies come from diversified backgrounds including – healthcare, retail, manufacturing, Internet of things (IoT) and B2B commerce.
As a matter of fact, SAP has also expressed keen interest in taking an equity position and referring a start-up to their M&A team for the next stage of growth if required.
The start-ups that made the cut are: –
- CloudKare: a cloud-based inter-operable electronic health record platform that makes healthcare efficient by removing paper from the ecosystem.
- BluBirch: an end-to-end reverse supply solution to maximise value from unutilised/returned IT inventory of retailers, enterprises, and OEMs (Order Equipment Manufacturers)
- ai: a Ratan Tata-funded company that provides a chat-bot concierge that closes transactions by accepting customer orders and fulfils it through partner merchants.
- Sellerworx: an eCommerce technology solution that helps SMEs (Small Medium Enterprises) manage their online operations across marketplaces such as Amazon, Flipkart, etc., and become active on eCommerce platforms
- Stratawiz: an app that helps to enhances the performance, productivity and engagement of sales teams with themes such as gamification.
- Moglix: an online marketplace to buy industrial products
- Ecolibrium Energy: an energy analytics platform that helps business optimise their power consumption and manage their usage of energy well. It is a device-and-high-end automated analytics play that offers insights into using their energy resources better.
There are three more start-ups that will make it to the Studio that would be named over the next few months.
Why did SAP start an Accelerator Programme in India?
According to NASSCOM (National Association of Software and Services Companies), being home to one of the fastest growing ecosystems of start-ups and one of the most fertile grounds for new businesses; India is now being recognised as one of the most beneficial markets for start-ups. The number of new companies launched in India has also grown by 40% in the last one year.
They, for a fact, realise that start-up innovations are happening in India and they also recognise that they have to support the Start-up Policy that was launched earlier this year by the Prime Minister of India.
Hence, the aim of SAP Startup Studio is to support Indian start-ups with a complete ecosystem, and since this initiative perfectly fits into their philosophy of fostering entrepreneurship and promoting innovation for growth and development; SAP Start-up Studio will definitely serve as a catalyst to further accelerate the growth of start-ups.
In fact, during the launch of the SAP Start-up Studio initiative, SAP Labs also announced that they are even changing their HR policies to encourage their 8000 odd employees to become entrepreneurs. If any employee wishes to start their own company, they can take a two-year sabbatical from the company and do so. If the start-up succeeds, then they can continue their business or they can come back to SAP.
Having said that – SAP’s entry into the start-up space started in India is not new! The company has been involved with start-ups here, in a stealth mode since the last two years now.
It has also been running a social entrepreneurship and innovation programme in collaboration with the Centre for Innovation, Incubation and Entrepreneurship (SAPCIIE) at the Indian Institute of Management (Ahmedabad).
Why Corporate giants are actively getting involved with start-ups in India?
To understand this, we must zoom out and take a look at the start-up ecosystem from a broader perspective!
For the first 10-15 years, the multinationals were setting up GICs (global in-house centres) here to save money. The initial push for the GICs had come from the reforms in TRIPS (Trade-Related Aspects of Intellectual Property Rights).
These reforms provided an IP (intellectual property) protection, due to which, the R&D centres had mushroomed. During that time, more than 85% of the patents that were filed in India came out of the labs of multinational companies. Then suddenly, it all became about talent, and GICs became value centres.
And recently, since the last few years, this has moved on to tapping start-ups, and the GICs are now looking for breakthrough innovations that will help their parent companies.
According to a report filed by consultancy firm Zinnov, there are more than 40 accelerators in India and one-third of them have been started by the multinationals.
In fact, some giants like Google and Microsoft have adopted a two-branched strategy wherein they invest, as well as incubate start-ups. Google Capital ( the in venture arm of the Google) has already invested in four Indian start-ups, while their accelerator programme called – Google Launchpad has recently inducted its second six-month mentorship batch that takes place at the Google headquarters in Silicon Valley.
Other than these, most recent entrants include – Cisco, Autodesk, Amazon Web Services, Oracle, Microsoft Ventures, Target, etc. At par with these MNC’s; the International Institute of Information Technology Bangalore (IIIT-B) and the Indian Institute of Management Bangalore (IIM-B) have also entered into a Memorandum of Understanding (MoU), to enable them to work together to provide deep technology and business mentorship for young technology start-ups and entrepreneurs, as well.
These new-age programmes offered by the corporates come with a mutually beneficial partnership that provide luring benefits to the small companies such as innovative solutions and a ready market to test them.
Clearly, large corporates are now realising the imminent threat that they face from these young, growing and disruptive start-ups. They realise that it is in their best interests that these start-ups use their technology and these programmes are a good way to make ensure this.
And the recent initiatives implemented by the government, especially the Digital India, Make in India and Smart Cities projects; the multinationals have further attracted these corporates towards the third largest start-up ecosystem.
Being the third most lucrative and emerging start-up destination (behind the US and the UK), last couple of years have been phenomenal for the start-up ecosystem in India.
Evidently, it remains a fact that, start-ups are the fastest to develop a product and make it ready for the market. India accounts for more than 4200 start-ups, out of which 72% of the founders are below the age of 35. The recent policy changes and the technological evolution have helped the ecosystem furthermore.
Due to these factors, the multinationals have been quick to understand the scope of this energetic community, making India a destination of choice for the corporate accelerators!