As one Indian accelerator dies, another one spreads its wings
The last week has brought some important developments in the area of accelerators. A few days ago, Morpheus, India's best-known private accelerator, was shutting down — or, as the founders put it, "pivoting" to a new model after six long years of operation. Now, say the founders, the new focus will be to look at funding companies that are in the two- to five-year time period, although they are still evidently in pursuit of a workable business model.
The Chandigarh-based firm has reportedly incubated over 80 startups since inception, including trailblazing real-estate site CommonFloor, which just received $10.4 million from existing investors, Accel India, and Tiger Global in Series D funding, bringing its total money raised in the last few rounds alone to $17.9 million. Five of the 80 have apparently been acquired, and 25 have shut down.
To many in the industry, Morpheus shutting down sounds the death knell for the stand-alone Indian accelerator, which is under pressure for many reasons, as this article in TechCrunch explains. Firstly, there are too many startups with little originality, leading to very few exits. This makes it a difficult business model to sustain. Secondly, there's competition from other entrants with deeper pockets, such as Google-backed 10,000 startups or GSF Accelerator, whose Bangalore-based company Little Eye Labs was recently acquired by Facebook. Thirdly, there is competition from VCs who themselves are looking to unearth the next big goldmine albeit at an infant stage. Lastly, unlikely multinationals like US retailer Target (yes, you heard that right) are also diving into the fray by planning to set up one in Bangalore.
So it makes total sense that the one accelerator still thriving is Microsoft Ventures, backed by one of the world's tech giants in association with Indian industry body National Association of Software and Services Companies (Nasscom).
The accelerator today announced 16 startups for the 2014 summer batch in India, according to an article in Mint. They were chosen from 850 applications that were submitted over a two-month period, after which the chosen few get tech-related assistance, mentoring, and networking advice. Apparently, Microsoft doesn't dole out funds, nor does it pick up a stake in any of the companies.
This time around, Microsoft's program had one big difference. "The good thing about this batch is that most of these companies already have a certain amount of customer traction, and the Accelerator Program is well positioned to step in and help them move ahead faster than they would have otherwise," said Ravi Narayan, director of Microsoft Ventures, in the Mint article.
This attribute allows six lucky ones to now be part of the newly minted and more advanced Accelerator Plus Program. They are: MyBusTickets.in, a booking website; Praxify, a healthcare platform; Thinxstream, a device management and printing solutions startup; Touchfone, a mobile apps maker; ZingHR, a cloud-based human capital management solutions startup; and Zoom, a self-driven car-sharing startup.
The rest, which will be part of the four-month-long program in Bangalore, are: Metaome, a life sciences data analytics startup; SlideRule, an online course aggregator; Voonik, which does customized styling; IntouchApp, a phone contact backup and sync startup; InstaSafe, a cloud-enabled security solutions provider; App Virality, an in-app solutions provider; and Appointy, which does scheduling appointments over the phone.
Four of them, according to the article, were picked at technology product conclaves hosted by Nasscom. They are: Bookpad, an online ebook reader with access to an e-bookstore; Praxify, a healthcare platform; Imly, a marketplace for home-cooked food; and Boutline, an event audience engagement app.
How important is this competition to a startup's future? Apparently, around 80 percent of the 35 startups that have come out of this program since August 2012 have attracted funding, while two of them, Adepto and Plustxt, have been acquired.