Of the various ecosystems being created for startups in the state, incubators are perhaps the most happening.
Goa’s progress in incubators is smoother than expected. While other support systems such as mentorship, venture capitalists, angel investors, bootcamps etc., are yet to take off properly, incubators are moving forward at a fast clip. The state currently has five incubators (see box) and ground level check reveals that, interest in setting up new incubating facilities are high thanks to support from the government by way of incentives.
Recently the EDC launched Ignite EDC Innovation Hub, an incubator targeted at young techies. A smart incubator with 78 seats it is currently the largest in the state and generating interest among startups looking for home base. EDC has set aside Rs five crore as seed capital for entrepreneurs taking space in the hub and initiated the process of registration for those interested in joining up.
Close of the heels of the EDC incubator there are three more in the fray. The Don Bosco College of Engineering, Fatorda, is planning to set up an incubator in partnership with the DRDO while, the Goa Institute of Management (GIM) Sanquelim is doing the preparatory work for an incubator. Similarly, BITS Pilani, Goa, that already had a virtual incubator in the campus is all set to launch BIRAC Bio-NEST, a revamped center by September next month.
Educational institutes in Goa, affiliated to a recognized university are eyeing incubators because they can avail of a one- time grant of up to Rs10 lakh towards capital expenses. Further, an education institute with existing incubation facilities can also avail the grant for capital expenses for further expansion of facilities. Institutes claiming the benefits cannot restrict the facilities only to their students.
“There is an availability of almost 1000 incubation seats in the state,” says D S Prashant , General Manager, Centre for Incubation and Business Acceleration (CIBA), Verna and member of Goa State Innovation Council. He says that, the huge presence of incubators in the state is an indication of opportunities available to startups.
According to Sudhir Shetty, founder, Expressotive, a company that deals with digital marketing and web solutions, incubators are important role for nurturing purposes. “It gives startups the same support as a student gets from teachers in school. Few years back there was no proper guidance available but at an incubator a startup gets to use a host of infrastructure and mentorship facilities along with the opportunity to attend various events and network across the country just at a minimum cost of Rs 3000 per seat for a month.”
Shetty explains that, startups usually lack the finance to start off and incubators reduce the cost incurred on setting up business. “At an initial stage mentorship is a prerequisite as without guidance working from home one is not sure if the idea will click and convert into a successful business model.” He adds that, the push given by the mentors and the working space provided at nominal rate frees up startups from the hassles of investing in an office space.”
Ramchandra Prabhu Salgaonkar, co-founder, Soul Travelling, Margao, a travel startup, says “We were one of the first to be virtually incubated at the CIBA, Assagao, as we had to work from different places and did not require a permanent office space.”
Salgaoncar adds that, as a virtual incubatee the company was given access to the conference room twice a month and could approach the center personally or telephonically for mentorship. “Added to this the virtual facility is also cost efficient as it comes with a onetime payment of about Rs 3500 for a duration of 11 months,” he says.
For quick access to incubators the government is asking local startups to register under the StartupIndia portal and be recognized as a certified unit. The compulsory registration has several benefits. “Before the launch of the policy startups did not have any recognition to avail benefits especially in the IT sector as we could not apply for loans in the absence of assets” says Shetty.
Registration also gives an add-on advantage of the start-up being reimbursed a fixed amount for the seats occupied by them at incubators listed by the Start-up Promotion Cell (SPC). The benefits at the incubators can be availed maximum for a period of 1 year per startup.
Ryan Carvalho, IT consultant who is part of the EDC management team, says that, the EDC incubator is set up with considerable effort. “During the study tours conducted by us we visited incubation centers across the country in Mumbai, Banglore, Telangana and found out that new companies were interested in moving to Goa to setup their business. That is when we realized that incubators could create employment opportunities for locals in the state.”
It must be pointed out that, the existing five incubators in the state (see box) have distinct positioning. At CIBA- Verna and Assagaon, the thrust is on IT, food processing, mixed technology and solid waste management. In mixed technology the preference is for startups who are in the field of solar, wind energy or energy saving devices. Both the CIBA incubators have supported about 70 companies collectively. The Verna center has incubated 40 companies while the Assagaon center 30 companies.
The BIRAC Bio-Nest, focus is on health and environment while the Manovikas School incubator is targeted at science and technology units. The EDC incubator favours IT units although it is also open to startups in other sectors, viz. if the startup business idea is really innovative.
Goan incubators like elsewhere in the world run according to plan. They screen applicants for viability of the business idea since most of them provide some kind of funding support to the units. The funding support is optional depending on the requirement of the startup. Further incubators charge a monthly fee per seat and also pick up equity skate in the unit to generate income for themselves.
“At Ignite we follow a separate selection process for the funding and for the incubation process. Selection of the startup teams is very important for the business to scale so while selecting we plan to narrow down our search to select the few that show potential,” reveals Ryan Carvalho, IT consultant who is part of the EDC management team.
The mentor team in an incubation setup has its own challenges. “Getting the required team to mentor the startups in a specific area especially in technology sector is a challenge compared to other metropolitan states where these experts are readily available. However we will use the brand of Goa to rope in these experts to come to the state on a business cum leisure trip says Ravindra A Manerkar, operations head, Ignite EDC.
So when does the startup leave the incubator? “It is usually when the company starts scaling in terms of the numbers of employees it can hire and once there is a demand for their product or service in the market that they prefer to move out of the incubator” says Shetty.