As the fastest growing economy, India provides significant challenges across industries and society, which emerge as opportunities that start-ups today identify and fulfil. The variety of use-cases which these opportunities offer help start-ups develop robust solutions iteratively with the option to adapt to any global economy. In an interaction with Poulami Chakraborty of BW SmartCitiesWorld, Avnish Sabhrawal, Managing Director, Accenture Ventures and Open Innovation reveals, how the combining effects of new technologies is causing a major disruption of start-up industry. Excerpts below:
Would you share with us how Accenture Ventures is leveraging the scopes and opportunities for Indian Start-ups enabling them to grow to global standards?
Accenture Ventures partners with and invests in growth stage Deep-tech B2B start-ups in areas such as artificial intelligence, block-chain, extended reality, Industry X.0 and New IT. As a bridge to the global innovation ecosystem, we help unlock growth opportunities for our clients by bringing them together with the best-in-class emerging enterprise start-ups to accelerate their transformation. By partnering with and investing in the next wave of disruptive technology start-ups, we bring an unparalleled viewpoint and inspire our clients with innovative solutions that solve today’s problems and capitalize on tomorrow’s opportunities. Moreover, start-ups are provided direct access to Accenture’s Global 2000 clients, thereby helping them scale faster. Besides India, we have engagements with start-ups in US, Middles East, Australia, Japan, and many other countries.
What are your views about the Start-up mission of the Government of India? Is India ready to boost the economy with start-ups?
With the 3rd largest start-up ecosystem, India has been buzzing with an entrepreneurship wave. Recent years have established India as not only an attractive destination for investments but also demonstrated its ability to provide returns to the Investor ecosystem with successful exits. With investments in B2B also picking up in FY19, we see a big shift in interests of investors and strategic partners as well.
Launched on January 16, 2016, the Start-up India initiative marked its three-year anniversary last week. In between 2016-2019, 15,113 start-ups were recognized under the Start-up India program across 492 districts in 29 states and six union territories. Even more notable is that 55% of the recognized start-ups are from Tier 1 cities, while 27% from Tier 2 cities and 18% are from Tier 3 cities.
The 19-point Start-up India Action Plan envisaged several incubation centers, easier patent filing, tax exemptions, and ease of setting-up of business, an INR 10,000 Cr ($1.45 Billion) corpus fund, and a faster exit mechanism, among other things. The government of India has enabled many processes to help improve the ease of doing business demonstrating to the global community its focus on growing the Indian start-up ecosystem.
The need of the hour is to enhance skilling and employability of the younger generation and allow start-ups to participate in the Government’s own development programs to deliver innovative and cost-effective solutions. It will be interesting to see what benefits are announced for the start-ups in the upcoming budget and I am personally hoping for further simplification of tax laws for start-ups.
What trends in start-up development and growth have you noticed in recent times in terms of their focus of domain?
While areas such as fin-tech and health-tech will continue to grow, we should look out for the growth of Business to Business (B2B) start-ups based on deep technology in the next 5 to 7 years. According to the industry body, National Association of Software and Services Companies (NASSCOM), the number of deep tech start-ups founded in India grew at the rate of 50 percent in 2018, even as the overall start-up birth rate was 12 percent during the same period. A total of 1200 start-ups were founded in the deep tech sector in the past five years. IoT, data analytics & AI accounted for one-fourth of the total start-ups founded in 2018.
Things are also looking up from the investments and exits perspective. The composition of Venture Capital has become much more diversified with funds from Japan, China, UAE, and South Korea investing aggressively into the Indian startup ecosystem. Even more heartening is to see Indian Corporate Venture Capital (CVC) investing in startups led by Reliance and other industrial conglomerates like TVS and Hero Group. The Flipkart acquisition by Walmart has increased investor confidence significantly.
Currently, we are witnessing the rise of new technologies such as IoT, AI, Robotics, Block-chain, and AR/VR. The combining impact of these technologies is leading to huge disruption in multiple industries. According to Accenture’s disreputability index, software and platform providers, communications, media & entertainment, high-tech companies, and industrial equipment & machinery witness constant disruption. While, companies in the utilities, health, capital markets, chemicals, and CG&S industries witness a moderate level of disruption.
What have been the key challenges that you faced while creating a win-win situation for both start-ups and their clients and Accenture? How have you been able to mitigate the same?
It starts with the client understanding that start-ups provide only a point solution and not the entire business challenge, which is where strategic partners like Accenture step in. Secondly, start-ups need to understand how to navigate complex organizations such as Global 2000 clients and prepare for dealing with multiple stakeholders like business and innovation teams, procurement and legal functions etc. Clients and start-ups end-up doing much Proof of Concepts (POCs) without clearly identified success criteria and buy-in from a business sponsor leading to many innovative solutions stopping at the POC stage.
Accenture Ventures uses the open innovation approach as a bridge between our clients and the start-up community. We help de-risk, deploy and scale start-up solutions in large clients and underwrite the success of this integration. Through Accenture Ventures, clients can tap into the IP and product expertise of technology start-ups and the domain expertise provided by Accenture. We have successfully taken innovative solutions by more than 100 start-ups and deployed them at scale with our clients in India and across the world.
Given the fact that every country has its own strengths in terms of the start-up ecosystem, what is the key advantage for Indian start-ups?
As the fastest growing economy, India provides significant challenges across industries and society, which emerge as opportunities that start-ups today identify and fulfill. The variety of use-cases in which these opportunities offer help start-ups develop robust solutions iteratively with the option to adapt to any global economy. In addition to this, the Indian start-ups focused on the Business to Consumer (B2C) segment have been able to scale and become unicorns due to the huge consumer base that India offers. Needless to say, our pillar of strength and differentiation is the young, diverse, multi-skilled talent pool which has made India the third largest start-up and fastest growing ecosystem in the world in a short time span. Last but not the least, Indian start-ups such as Freshdesk and Dhruva have been able to leverage B2B SAAS models, making India one of the global leaders in this space.
What are the key focus areas for Accenture Ventures in this current financial year?
Accenture Ventures India is always looking to experiment with new and innovative engagement models with start-ups to take our open innovation programme a notch higher. We also look forward to tie with more ecosystem partners, both in India and at global level. We are excited to look at investment opportunities, both in the commercial and social space.
We are currently organising the Accenture Ventures ‘Applied Intelligence’ Challenge 2019 which aims to identify and recognize deep-tech growth stage start-ups with the most innovative B2B use cases in Artificial Intelligence, Data, Analytics, Automation, and Industrial AI. The three winners will get the opportunity to collaborate and co-create with Accenture and its clients across the globe. Additionally, the winners will be mentored by Accenture leaders, introduced to industry forums where Accenture has a presence and will be given access to the Accenture Innovation Hub where they can further scale their solutions. This is the second edition of the Accenture Ventures challenge for Indian deep tech start-ups. Last year’s challenge focused on Industry X.0 with categories such as supply chain and logistics, R&D and engineering solutions, manufacturing, and production, support, and services.
How do Accenture Ventures plan to support the Government of India’s Start-Up and Digital India initiatives?
We work with different industry forums and associations in India to push forward the country’s start-up and digital agenda. Through these forums, we have been providing suggestions and ideas that can help strengthen the start-up ecosystem and help the start-ups scale faster. We expect many of the ideas to come to fruition in the next few years.