The people of Gujarat and Gujaratis in particular have earned a reputation as being shrewd businessmen, even to the point that it has become a cultural stereotype. But the land of Mahatma Gandhi has always come up with unique ways to overcome problems — just like the great man did with that charkha (a yarn-spinning wheel).
Even among technology innovations, Gujarat has stood out among its peers. The state has was named ‘Best Performer’ in DPIIT’s 2018 state-wise ranking for the startup ecosystem. According to DataLabs by Inc42, in 2018, over 5K startups were active in Gujarat, with over $135 Mn poured in funding over the course of the year in these startups. In 2019 so far (Q3 2019), over $14 Mn has been invested in startups from Gujarat.
The rising investor interest is thanks to Gujarat being the first state to have an official IT and Electronics Policy and also being the first to implement Student Startup and Innovation Policy (SSIP). With esteemed educational institutions such as IIM-Ahmedabad, National Institute Of Design (Vadodara), as well as the Gujarat Technological University (GTU) which was the first to adopt SSIP under the Gujarat University Startup and Entrepreneurship Council (GUSEC) led by director Hiranmay Mahanta and founder Rahul Bagchandani.
This support system for startups has many layers starting with the government and going up to private incubators, educational institutions and individuals. Here is a quick overview of the state of the startup ecosystem in Gujarat:
Government’s Efforts For The State’s Startups
The government of Gujarat has been very proactive in its initiatives and measures to help startups grow and scale-up. The official IT and Electronics Policy brought in in 2016 will be updated in 2021. It has the following objectives:
- Facilitate at least 2K startups through the policy
- Establish at least 50 incubators in Gujarat
- Develop 1 Mn sq ft of incubation space
- Facilitate investment of $1 Bn to startups in the state through various private and government funds
In line with this policy, the Gujarat government claimed to have provided financial assistance of over $3.2 Mn to more than 175 startups in the span of 2016-2018. Still, the goal is a long way away.
In addition to that, the state implemented the first-ever Student Startup and Innovation Policy in 2017 to promote the young innovators from the state, which seeks to:
- Convert at least 1% of graduates into job creators
- Harness 500 student startups in the next five years
- File at least 1K patents from universities in the state every year
- Support at least 1K student-led innovations every year
- Build capacity for at least 200 premier educational institutes in the state
Enablers Of Gujarat Startup Ecosystem
Gujarat is also blessed with an ecosystem of private enablers such as incubators, accelerators and coworking spaces. Cities such as Ahmedabad, Vadodara and Surat have many universities providing student innovators with incubator facilities and young talent. Adding to that are organisations such as TiE and eChai, that are providing startups with the right networking platforms.
Apart from these organisations are the contributions of the state’s incubators, accelerators and coworking spaces.
Incubators And Coworking Spaces
Gujarat’s institutions are the true enablers of its startup ecosystem. Home to universities such as Ahmedabad University, IIM-A, MICA, NID, NIFT and more gives the state advantages of having promising talent as well as a culture of innovation. Here are some of the most prominent names in Gujarat in this category:
- iCreate: Launched by the government of India, International Centre for Entrepreneurship and Technology (iCreate) is a joint venture between Gujarat Mineral Development Corporation Limited (GMDC) and Gujarat Entrepreneurship and Venture Promotion Foundation (GEVPF). It aims to promote and help startups by providing them with finance, mentors and tech assistance.
- Venture Studio: Established by Ahmedabad University in collaboration with Stanford University–Centre for Design Research in 2011, VentureStudio is a technology business incubator. Over the years, this incubator has helped over 45 startups across various sectors such as healthtech, edtech and more.
- CIIE.CO: Founded at IIM Ahmedabad in 2002, as an academic centre, CIIE.CO (Centre for Innovation Incubation and Entrepreneurship) has grown to include acceleration, incubation, investment, research and more. Among its various initiatives, it has conceptualised and hosted India’s first accelerator, created a cleantech-focussed fund, accelerated over 600 entrepreneurs, funded over 120 startups and more.
- DevX: One of the most prominent names in the coworking community in the state, DevX has an accelerator programme in place to boost independent innovation in the state. Under this programme, it offers technical mentorship, legal advice, funding support and more.
- The Address: Like DevX, The Address is one of the most prominent names in the coworking space community in Gujarat. Not only does it provide spacious workspaces for startups but it also helps them by providing them services such as legal consultancy, asset management, strategic planning and more.
The Investor Community
The investor community in Gujarat has taken active participation in helping innovative ideas from the state in the growth journey. The state is equipped not only with many investing organisations but also angel investors, a few amongst these are:
- GVFL: Founded in 1990, Gujarat Venture Finance Limited (GVFL) was the first Venture Capital to be set up in India. Over the course of the three-decade-long journey, GVFL has supported over 100 entrepreneurs, managing director Sanjay Randhar told Inc42.
- GAIN: Gujarat Angel Investors Network (GAIN) have successful entrepreneurs with years of industry experience helping other early-stage startups in their growth and scale. Apart from providing capital, the investors in this network also provide mentoring and network access to budding entrepreneurs.
Angel Investors
In addition to angel funds, Gujarat is also home to many angel investors actively looking to invest in startups at an early stage. Thanks to GAIN and other investing organisations many individuals have gained prominence as angel investors and active mentors in the startup community in the state. Some of them are:
- Pavan Bakeri, managing director, Bakeri Group
- Sunil Parekh, founder, Gujarat Angels
- SB Dangayach, founder and trustee, Innovative Thought Forum
Gujarat Startups In The Spotlight
The efforts of the enabler community coupled with the government’s push for entrepreneurship and innovation has resulted in many startups hitting the big time in Gujarat.
Names such as Lendingkart and Infibeam have also been identified as soonicorns or startups that are on track to hit a $1 Bn valuation in the next couple of years.
- Infibeam: This ecommerce company which runs payments processing services CCAvenue has become one of the most prominent names from the state. Not only did it record net profit growth to $3.6 Mn in December 2018 from $266K in December 2017, but it also signed an MoU with Middle East’s investment firm UniPropitia FZCO to expand its services to the Arab League countries.
- Lendingkart: Among the most prominent names is Lendingkart from Gujarat. The startup today has a presence in three cities (Ahmedabad, Bengaluru, and Mumbai) and has helped MSMEs all over the country. Soon to become a soonicorn, this startup has raised over $200 Mn funding and claims to have reached more than 1300 cities across all 29 states and union territories of the country.
- Menstrupedia: Founded in 2014, this content startup has not only penetrated the domestic markets but has also crossed the borders to reach users in 20 different countries. Using a comic book format to educate people about menstruation it is present in over 6K schools, 120 NGOs.
- Beardo: This men’s grooming brand from Ahmedabad has earned fame not only in the state but is also one of the prominent names in the country for its sector. It has seen interest from various giants in the country such as the FMCG company, Marico which acquired a 45% stake in the startup in 2017 and plans to acquire it by March 2020.
- Torchit: An early-stage startup discovered by Inc42 during its visit to the state with BIGShift, Torchit is helping the visually challenged with their assistive mobility device. It’s flagship product, Saarthi, uses the ultrasonic sensor to help those with impaired vision understand how close or far objects are in closed spaces.
- Reelo: Another early-stage startup from Inc42 BIGShift, Reelo is a loyalty programme platform helping local stores and shop owners grow their businesses by acquiring new customers and retaining old ones. Starting its operations in 2017, the startup claims to have a presence in 24 cities and more than 1,500 clients.
The Gujarat Startup Ecosystem Lag
Despite the interest from the ecosystem enablers and active measures from the government, the Gujarat Startup ecosystem is still far behind the likes of Karnataka Delhi and Maharashtra.
One of the many reasons for this is the focus on traditional businesses rather than tech, which is slowly changing. Cities such as Surat which earned prominence for textile manufacturing and Ahmedabad which is an education hub have become home to many innovative startups, which is helping close the gap when it comes to startups.
Some industry stakeholders told Inc42 that the lack of corporate establishment and industry participation in technology ventures is also holding back innovation. “One thing which is definitely lacking is the corporate or industry participation in the startup ecosystem. Government has done its bit, they have worked on the policies, they have created a pipeline, but there are very limited industries in Gujarat which have explored the startup ecosystem as one of their initiatives. There needs to be a little more proactive participation from the industry” said Dheeraj Bhojwani, executive director, TiE Ahmedabad.