Nirmaan, the pre-incubation centre of the Indian Institute of Technology, Madras (IIT-M) is planning to scale up operations to support around 100 student start-ups. The institute will also approach public and private sector companies to raise corporate social responsibility (CSR) funding for these enterprises.
Some 12-15 out of the 80-odd start-up teams that it has supported during the past four years have progressed to the incubation stage and some have also started raising funds, according to Satyanarayanan Seshadri, assistant professor, IIT-M and faculty advisor, Nirmaan.
The institute has been nurturing new ideas through its Centre For Innovation (CFI), where students work on projects based on their passion. In 2015, the pre-incubation initiative conceived a plan to convert some of these projects into commercial start-ups. The centre was restructured into a full-fledged campus pre-incubator in 2017, where students would work together under a Cohort model for which they could apply twice a year. Nirmaan offers seed funding as a grant from the alumni fund, and CSR funding. It also has mentors from the alumni who voluntarily guide the start-ups.
Nirmaan has been doing some experimentation on what works and what doesn't, and is figuring out how to deal with incubation teams, as academics is top priority for students and they are working on start-ups ony as a secondary activity.
“We cannot impose the same conditions that are demanded of full-time start-ups. We have now come up with a model in which we can manage these things. Having put this in place, we are looking at scaling up the operations in 2020-21,” said Seshadri.
"We want to reach about 100 teams in our pipeline by 2021. The typical conversion we have seen is that if you have 100 teams, about 30-40 will launch as a start-up. We are looking at 30-40 teams to be launched as start-ups from the programme by 2021, per year," he said.
The centre has so far supported 80-odd teams of which 30-35 may have moved out after graduation. Of this, around 12-15 have launched their companies. Around 50 teams are active in the pre-incubation programme at present.
Pre-incubation is needed to meet the plethora of challenges that a start-up faces even before it gets into the regulatory work necessary for registration. Nirmaan encourages its students to first work on identifying market segmentation, figuring out the customer and what it takes to give a full product or solution to the customer. Ideally, a start-up would register as a company only if it has found an offering somebody is willing to pay for.
The venture will graduate from Nirmaan either by registering as a start-up and move out or when the students graduate from the institute. Those who register the start-up as a company can go to IIT Madras Incubation Cell (IITMIC) or other incubators across the country. Nirmaan has been working with the Centre for Innovation Incubation and Entrepreneurship (CIIE), IIM Ahmedabad; NSRCEL of IIM Bengaluru, and others.
Going forward, Nirmaan will raise money from the CSR funds and alumni to support the teams as plans are to increase the grant to Rs 5 lakh per team from Rs 2.5 lakh currently. It would also look at initiating a programme to offer a stipend to teams whose students have graduated but need some more time to launch their start-ups.
Successful start-ups from Nirmaan include Tan90, which is developing portable cold storage that runs off-grid with zero-carbon emission. It has raised funds at a valuation of around Rs 7-8 crore. Then there are Melvano, an intelligence social network for entrance exams, and Involve, a peer-to-peer learning company, DbyT Dynamics, which has developed an e-bike, and Digital Flora, which is into agrotech.
The challenge is that the start-ups with commercially potential are often abandoned once the team decides to move on for further studies, said Seshadri.