The incubation centres at the Indian Institutes of Technology (IITs) were set up for converting ideas to practical solutions. They are now churning out some real success stories.
Take the case of IIT Bombay. It was among the first engineering institutions in the country to set up an incubation and innovation centre to support many bright sparks. “Incubation centres are a platform where ideas and crude prototypes can be turned into products that can be commercialised. We established the centre at out institute the year 2000 and have incubated 48 companies, of which about 20 have been funded,” says Poyni Bhatt, chief administrative officer at IIT Bombay’s Society for Incubation and Entrepreneurship (SINE).
Elaborating on how the projects are selected, Bhatt says, “During screening, we see whether the business plan can be incubated and its chance of reaching the market. The students working on the projects have to justify the need for it to be funded before we actually go ahead. Our budget is upto `20 lakh per company and we also get support from the Department of Science and Technology (DST), the Technology Development Board and the Department of Information Technology (DIT),” adds Bhatt. Besides financial funding, the institute also provides subsidised infrastructure, mentoring and small seed funding.
SINE’s work includes incubating early stage entrepreneurial ventures based on technology and innovation, creating physical infrastructure, facilitating networking with experts and advisors for the incubatee companies and identifying innovations which have potential for commercial ventures.
According to BV Phani, coordinator at the SIDBI Innovation Incubation Centre (SIIC) of IIT Kanpur, “The first source of start-ups at IIT Kanpur were the studens’ research projects, the results of which pushed them to start their own venture for commercialising the product/service. Faculty mentoring is mandatory for companies incubating at our institute. The maximum fund allotted under any project is `25 lakh. The limit of funding is governed by the rules/policy of the funding agency. SIIC has availed funding from different government agencies, namely DST, DIT, Department of Scientific and Industrial Research, Ministry of Micro, Medium and Small Enterprises, and Biotechnology Industry Research Assistance Council-Department of Biotechnology.”
The corpus funding has been availed from IIT Kanpur, UP Government and SIDBI Bank. It is mandatory for the incubated companies to nominate 3% equity to IIT Kanpur and if it is a faculty company physically incubating at IIT Kanpur, then they have to nominate 13% equity to the institute. An incubated company availing seed fund from IIT Kanpur and opting to repay part of the loan via equity also nominates its equity to IIT Kanpur (option of repayment of 50% to 25% equity).
“The incubation approval is given by a committee based on the principle of converting potential ideas into a commercial product. Currently, the centre is mentoring 25 projects/incubated companies,” says Phani.
IIT Kharagpur is also providing incubation space for R&D of their products. “We are arranging seed funds/grants through various projects sponsored by the Central government and mentoring to develop their products for commercialisation. About 60 projects have been funded and mentored through various projects sponsored in different domains in the last five years. We are picking 3% equity of the funded company on case to case basis. Around 50% of ideas are converted into real-life solutions,” says Indranil Sengupta, managing director, Science and Technology Entrepreneurs’ Park, IIT Kharagpur.