Chennai latest dot on countrys startup map

Written by Sajan C Kumar | Chennai | Updated: Dec 22 2013, 04:16am hrs
Chennai, the conservative capital of Tamil Nadu and traditionally considered to be a manufacturing hub, is scripting Indias second tech revolution, with at least a hundred startups even by conservative estimates setting up shop every year. Although it may be too early to start drawing a parallel with Bangalore, the Silicon Valley of India, the metropolis is fast emerging as a preferred destination for startups that are making a mark in the global IT space, owing mainly to an ecosystem built around investors and some young players.

Some of the big names that are already making waves in the market are Zoho Corp, OrangeScape, Interviewstreet, Extragram, Freshdesk, Tenmiles Corporation, Unmetric, and XLabz Technologies.

V Chandrasekaran, vice-president of The Indus Entrepreneurs (TiE), Chennai, and co-founder and COO, Secova, says locations like Bangalore that have been serving the demands of cutting-edge technology and innovation are reaching a saturation point. Chennai is a natural preference for the next generation of companies in software products and innovation, he adds. TiE is a non-profit trade group dedicated to fostering entrepreneurship.

Nasscom, the IT industry body, is also helping these small companies grow. Chennai has been identified as an important startup hub with almost 8% of the total startup applications coming in from this region. The Nasscom 10,000 Startups programme will aim at scaling up the existing startup hub to the next level of growth, says a Nasscom spokesperson.

There are other players which have helped build the ecosystem. The Startup Centre is one of them. Vijay Anand, founder and CEO of The Startup Centre, says metros like Chennai are rather old and the beauty of such ecosystems is that they are well balanced.

We are not in the Silicon Valley, yet we see a lot of startups imagining they are, and trying to imitate them and subsequently failing. The luxuries of some of these older hubs have been the support system in terms of businesses and capital to make things succeed in India.

Anand has worked with over 1,000 startups through his initiative. According to him, SaaS, Cloud and BigData are potential billion-dollar opportunities globally that are being serviced by Chennais startups.

Shailesh Davey, co-founder and vice-president, Zoho Corp, says most of its founders were from Chennai. When we started in 1996, there were hardly any product startup in Chennai. Now, there are a number of them. Ecosystems can happen only when the first few are bold enough to set up shop in a city. Others tend to follow when they see success of those other startups. Chennai has a lot going for it, by being a metro and the availability of a well-qualified and young workforce.

Zoho Corp has three divisions, each focusing on different market segments. While is the division focused on online business, productivity and

collaboration applications; ManageEngine is focused on enterprise IT management. WebNMS takes care of the needs of telecom original equipment manufacturers (OEMs).

From a coffee loving, film crazy, and unusually conservative city, Chennais journey through newer technology waves is getting attention worldwide. The Global Entrepreneurship Week (GEW) has shortlised Chennai-based Frilp among the 25 most innovative new companies in GEW 50 a list of the 50 most innovative new companies competing in Startup Open, a competition that recognises startups with high-growth potential. Frilp, short for Friends Help, is a social platform to discover shopping avenues, businesses and services through personalised recommendations from your friends.

Senthil Kandaswamy, co-founder, Frilp, says local business discovery and the advertising associated with it is a $70 billion-plus opportunity. Chennai is our base. Most of us happened to have been graduates of College of Engineering Guindy, Anna University, etc. Since we are from Chennai, the cost of operations also worked out to be less than, say, Bangalore, Kandaswamy explains.

Kandaswamy is betting big on the funding front. Our early stage funding came from the Centre for Innovation Incubation and Entrepreneurship, IIM-Ahmedabad. Currently, we are about to close a round of investment to take us to the next milestone from a set of top corporate executives from the US, Indonesia and India, he says.

However, Davey of Zoho Corp has a different take on this: We have had many buyout offers in our 17-year

history. That doesnt attract us. We believe in creating good products and building a long-term business, and have fun doing it. This long-term focus explains why we havent accepted any external investment.