Supporting companies with 25-300 employees, which have a proven business model, and helping them scale up is a real job-creating opportunity. India has over 1.2 million such companies.
Wadhwani Foundation (WF) is a philanthropic organisation founded by Silicon Valley entrepreneur Romesh Wadhwani, whose mission, among other things, is to accelerate development in emerging economies through large-scale job creation. Towards that goal, it has launched ‘Venture ScaleUp’—a business scalerator directed towards startups and small businesses. “It’s a long-term engagement model of 2-4 years,” says Ajay Kela, the president & CEO of WF. In an interview with FE’s Vikram Chaudhary, he adds that while there is sufficient interest within the startup ecosystem in India, there is almost zero support to established small businesses, which provide a golden opportunity to create jobs. Excerpts:
For over 16 years, WF has been working towards scaling up entrepreneurial ecosystem in India. What was the need to launch a scalerator now?
When we started, entrepreneurship was a foreign concept. Most IITians and IIMers were chasing MNC jobs or leaving India. We initiated entrepreneurship education in colleges with IIT Bombay, IIM Ahmedabad, BITS Pilani and others as founding members. While our efforts and those of others, and successes with companies like MakeMyTrip, Flipkart, Ola, Oyo, etc, have dramatically increased awareness around entrepreneurship, we still have a major problem with jobs being created.
India is in dire need of job-creators. While there is sufficient interest within the startup ecosystem in India (with 40,000 startups), there is almost zero support to established small businesses—which provide a golden opportunity to create jobs. Supporting companies with 25-300 employees (Rs 5-50 crore in revenue), which already have a proven business model, and helping them scale 2x to 10x is the real job-creating opportunity. India has over 1.2 million such companies. WF Venture ScaleUp attempts to address this market, and aims to be an open source scalerator model.
There are so many incubators and accelerators in India. How is WF Venture ScaleUp different?
One, it is focused on established small businesses with the potential to grow 2x to 10x. Two, it’s a long-term engagement model, with focused engagement during the initial quarters. Also, it’s a zero-equity, no-participation fee scalerator programme.
What kind of startups or SMEs should apply for WF Venture ScaleUp?
There are three criteria. One, as I said, it is for companies with the potential to grow 2x-10x and with 25-300 existing formal jobs (Rs 5-50 crore revenue). Two, there has to be vision alignment with the entrepreneur, i.e. the entrepreneur’s hunger to grow the business and openness to be supported. Three, we see the job-growth potential—business growth coupled with employment growth to address the job crisis in the country.
In which ways are startups and companies expected to benefit?
So, we provide coaching and consulting on three growth levers: customer, cash and capacity. Our growth coaches, domain experts and mentors work with participating companies one-on-one to identify growth initiatives and transformation plans, and help in executing those plans. We connect them with domain experts from specific areas—HR, sales, digital marketing, product development—to address specific business challenges.
Have any startups or SMEs already benefited from it?
WF Venture ScaleUp commenced through initial experimentation in January 2018 with a series of broad-based cohorts—three in Bengaluru and one each in Hyderabad and Pune. Today, more than 50 startups and small businesses, I must add, are benefiting from the structured interventions we’ve provided.
Is it only for existing startups/SMEs, or even aspiring ones can come on-board?
It’s designed for ‘motivated’ startups that are already into their journey and want to accelerate and expand their scale.
Today, what are the biggest hurdles that an entrepreneur faces in India?
One, access to experts/mentors—entrepreneurship is tough and unpredictable, and the failure rate is high. Ready access to relevant mentors and experts is priceless. However, in India, you can probably access funding more easily than finding the right mentors! A great way to find the right mentors is through building curated networks.
Two, access to capital—outside of the deep-tech startup ecosystem where access to equity financing seems to be abandoned, access to capital for traditional firms is still a big problem in India. High-interest rates for debt financing, need for collateral, limited access to financial institutes are major show-stoppers for small businesses.
Three, access to talent—talent acquisition and retention is a big challenge faced by Indian business, and limited availability of necessary skills impedes growth. There is a significant gap between what academia produces and what industry wants.
Do you plan to take WF Venture ScaleUp global?
WF operates in 20 countries across Asia, Africa and Latin America. Our goal is to replicate the WF Venture ScaleUp scalerator across these countries, with pilots in Chile and Mexico under way, along with India. Our long-term mission is to help create 4-5 million high-value direct jobs and 5x that number in indirect jobs, globally, in the next 10 years. To achieve this objective, we expect to support about 30,000 companies globally (and half in India) over the 10-year period. We are hopeful we can achieve these numbers through both direct WF programmes and partner initiatives.