Startup capital in the making

Facebook, WhatsApp and a number of globally-acclaimed eCommerce companies, which are billion-dollar firms today, started off small. Big ideas for such large businesses can originate from anywhere and can be indigenous, believes the Telangana Government that is working towards making Hyderabad the startup capital of India, writes Sudheer Goutham of Elets News Network (ENN)

Jayesh Ranjan, 
IT Secretary, Telangana

Hyderabad is currently the fastest growing IT destination in India and has earned a global recognition for it. The Telangana Government, which seems to be in a mission mode to turn the city into a startup capital, is creating world-class, end-to-end platforms for startups where a person can walk in with a ‘potential idea and walk out with a ready product’, as officials would claim here.

One of its biggest platforms for startups is T-Hub, which, they say, would be a catalyst in creating vibrant entrepreneur communities in India.

“It is like an incubator for incubators. All one needs is a great idea. We would say ‘Walk in with an idea and walk out with a product’,” says KT Rama Rao, the Telangana Minister for IT and Panchayat Raj.

The IT Minister, who is also the son of Telangana Chief Minister KC Rao, says that T-Hub is designed to encourage, attract and fuel technology startups.

First phase of T-Hub, a catalyst building housed over a 70,000 square feet area on IIIT campus, Hyderabad, inaugurated on November 5, 2015.

At a separate location, second phase of T-Hub, with an incubation space of 300,000 sq “, will be created over an area of 15 acre in the proposed Games Park at Raidurgam near Hitec City, Hyderabad. “With a cumulative investment of `300 crore, the second phase is expected to become operational in the next three years,” he said. Phase-I Catalyst building was developed at a cost of 40 crore Rs., all borne by the State Government.

What is T-Hub?

T-Hub is not just a facility building, but a platform. is platform, in addition to providing co-working spaces for startups, aims to be a support system that connects organisations and stakeholders, including venture capitalists, seed funds, and research institutes.

The Phase-I catalyst building can accommodate over 200 startups.

KTR, as the IT Minister is popularly known, says, “There are world-class facilities but our T-Hub oers something priceless, which is mentorship. A great idea or a startup needs care till it starts walking and then running. Here, the best mentors will come from the Indian School of Business (ISB) for business mentorship, from Indian Institute of Technology and Indian Institute of Information Technology, Hyderabad, for technology mentorship, and NALSAR University will help in providing legal support to the startups.”

Also, the big names in the technology industries, including Microso“ft CEO Satya Nadella, Adobe Systems CEO Shantanu Narayen, and Biocon’s Chairman & Managing Director Kiran Mazumdar Shaw would also be mentors in T-Hub. They will address the young entrepreneurs when they visit Hyderabad.

Infosys co-founder N R Narayana Murthy will also be a mentor and one of the principal advisors of the facility.

More than 60 experts have already been roped in from top academic institutions to play mentor’s role here.

No government intervention

Sreenivas Kollipara, Chief Operating Officer, T-Hub, said that T-Hub is a free-spirited not-for-pro“t organisation.

“The good thing is T-Hub is not a government organisation. We’re supported by the government and that’s all,” he said.

T-Hub has 10 board members, out of whom there is just one government representative — Information Technology, Electronics and Communication Secretary, Jayesh Ranjan.

The other board members include B V R Mohan Reddy, Chairman Nasscom. C P Gurnani, Chief Executive Officer, Tech Mahindra and Sashi Reddi, Founder of seed stage venture fund SRI Capital, among others.

T-Hub “nds money from the 10-member board, where each of the directors has contributed `1 crore each, while the land and building for the Hub were provided by the Telangana Government.

IT Minister KTR said, “The idea is to create a self-sustainable vehicle that gives wings to the dreams of startups. Representatives from giants like Google, Microso“, Nasscom and various incubators of universities will co-exist here. It is not-for-pro“t body, and the returns for the government would be in terms of employment creation and wealth for the startup State.”

How startups can enter T-Hub?

To begin with, the “first batch of 200 startups has already been screened from over 800. To meet the requirement of the startups, “fixed and flexible desks having all facilities would be provided, for which they would be paying a rent of `4,500 and `6,000, respectively. Every startup would be allowed to continue there for 1-1.5 years and then make way for new startups.

World-class building

The building is dotted with motivational slogans by startup founders, drawings of inventions and inventors on glass panels, and has large open areas meant for startups to exchange ideas.

As a breakaway from standard office spaces, the building has spaces categorised based on one’s functions. Named as Propels, Accelerators, Launch Pads, Breakout Zones, Discussion Surfaces, Meeting Rooms and Conference Hall, the building also houses pantry on each floor and a cafeteria on the ground floor. Ensuring complete utilization of space, two mezzanine floors using containers and cargo containers have also been constructed.

Startup funds

The Telangana Government has also plans for making available funds that play a crucial role in setting a startup. It wants to set up a fund size of 600 crore Rs towards innovation fund.

“The State Government will provide `10 crore towards seed capital fund to grant funding to the startups, and hoping that another `90 crore will be contributed by the private players for T-Hub innovation fund under public-private-partnership. In the beginning, the innovation fund will be `100 crore, but later we plan to take it up to over 600 crore Rs,” informs the IT Minister.

“There are many investors within India, who are looking for vibrant business ideas to invest in. T-Hub will provide a wonderful opportunity for them. During my visit to the US, I interacted with venture capitalists in Silicon Valley, including those who are connected to Hyderabad and are interested to pitch in for the innovation fund. Over 30 top technology companies have also evinced interest in T-Hub.Tata Capital has also showed interest in participating in the fund.”

The Minister hoped that some deals would be closed soon.In addition to the innovation fund, the startups will also have the opportunity to get funds from venture capitalists and angel investors.

KT Rama Rao Telangana Minister for IT and Panchayat Raj At a separate location, second phase of T-Hub, with an incubation space of 300,000 sq ft, will be created over an area of 15 acre in the proposed Games Park at Raidurgam near Hitec City, Hyderabad. With a cumulative investment of `300 crore, the second phase is expected to become operational in the next three years. Phase-I Catalyst building was developed at a cost of `40 crore, all borne by the State Government.

A line-up of international venture capital companies for funding the startups is also in place.

Big names in venture capital funding — Sequoia, Nea, Kalaari Capital, Peepul, Sri Capital and Naya Ventures — are supporting the T-Hub, indicating that the startups will “nd easy access to funding with a complete ecosystem in place.

In India, cities like Bengaluru, Mumbai and NCR are leading the startup story; Hyderabad, with the “rst-of-its-kind organised ecosystem, is aiming at leapfrogging to the front. The T-Hub is on way to becoming the country’s biggest innovation and incubation center and will provide a complete ecosystem.