The technology startup ecosystem in India has received a further boost with global banking giants entering into multi-pronged relationships with these firms to get access to innovative technologies
The wave of technology startup companies has steadily pulled in more number of participants into their ecosystem who come in the form of investors, partners or advisors. Today, even the large and well established corporates have thrown their hat into the ring, to seek access to technology which could potentially alter their business model and keep it on the forefront of innovation.
Leading this trend are the global banking giants like Citi and Wells Fargo who have launched new initiatives to tap into Indian tech startup ecosystem. This is done with a dual mandate by these banks who get access to cutting edge technology solutions developed by these new-age companies while also providing them a larger business platform.
The relationship between these financial institutions and tech startups creates win:win situation for both. The banks are able to integrate innovative technology solutions from these firms while the startups get the access to a global customer base and certain amount of funding.
India has become a attractive destination for these banks as the country is among the top five hubs for startups globally with presence of over 4,200 firms. Citi recently launched its Citi Mobile challenge as part of its global initiative for the technology companies in India where they can develop innovative solution which will run on the bank’s digital platform for its various kinds of operations like banking, e-commerce and transaction.
Kartik Kaushik, country business manager, Global Consumer Bank, Citi India, said, “The Citi Mobile Challenge is aimed at harnessing the talent and agility of the developer and start-up community in India to create affordable, accessible and transparent solutions for consumers.”
Similarly, Wells Fargo has got its global Startup Accelerator programme where it forms close alliance with these firms by picking up minority stake and looks at integrating these technologies into their operations. Steve Ellis, executive vice-president, Head of Innovation, Wells Fargo, said, the programme was started about a year ago in US after many of these startups were knocking on their doors with innovative technologies. The bank realised that they needed to get these emerging technologies faster into the company.
In the case of Wells Fargo, around 17 tech startups in India have applied for the accelerator programme and expects this pie to only get bigger. Ellis said that startups wanting to be part of this programme need to understand the bank’s business interests and they would be interested in solutions which fall into their requirement.
The interest shown by these banks in partnering with Indian technology startup is directly related to their business interests as they would like to remain ahead of the curve in terms of innovative digital solutions for the marketplace.
As in the case of Citi Mobile Challenge, the tech startups are also given mentoring, space and investment. It
recently announced the final shortlist of 20 companies selected for its programme with 12 of them being startups.
These were selected from over 1,300 entries and the solutions they came up were focused on multiple areas such as financial inclusion, online payment, customer engagement, internet of things etc.
According to Rajat Tandon, vice president, Nasscom 10,000 Startups programme, the most successful element of these kinds of accelerator programme has been the connect between startups and enterprises. “The startups may not actually require the funds but they need customers and this can be done through the participation by corporates,”
India is one amongst the first five largest startup communities in the world with the number of startups crossing 4,200, a growth of 40%, by the end of 2015, according to Nasscom. The total funding in the India based startups is estimated to be nearly $5 billion by 2015. The close relationship between the tech startups and corporates bodes well for the ecosystem. This will ensure that the innovation engine flourishes in India with more creative solutions.