This programme is designed to help startups address key growth challenges and effectively scale their businesses. Kotak aims to foster entrepreneurial success through its comprehensive offerings while aligning with its broader CSR and ESG commitments.
The Kotak BizLabs programme seeks to support 1,000 startups through a community engagement initiative in collaboration with premier incubators such as IIM Ahmedabad Ventures, NSRCEL at IIM Bangalore, and T-Hub.
Startups participating in the programme will gain access to networking opportunities, a virtual knowledge centre, and hybrid workshops in several states, including Maharashtra, Karnataka, Telangana, Andhra Pradesh, and more.
In addition to broad engagement, 50 high-potential startups will receive intensive acceleration support. Among these, 30 will be granted financial support of up to ₹15 lakh each.
For more on this programme and how it aims to support startups, CNBC-TV18 spoke to Rohit Bhasin, Head Affluent, NRI & Business Banking, CMO at Kotak Mahindra Bank; Himanshu Nivsarkar, Head of CSR & ESG at Kotak Mahindra Bank; Srivardhini K Jha, Chairperson, NSRCEL, Professor of Entrepreneurship at IIM Bangalore; and Chintan Bakshi, Partner of Incubation at IIM Ahmedabad.
Edited Excerpt:
Q: What prompted Kotak Mahindra Bank to launch this accelerator programme? Was there a gap you identified in the startup ecosystem, or does it largely align with a different strategic direction that the bank is taking?
Bhasin: Let me give you a bit of context on why this programme is extremely important for us. Self-employed customers are a key segment that’s important to us. Our bank has been built on the bedrock of this segment. While we have a share in the overall banking space, we have about a 4% share with self-employed customers. So, it’s a very core and important segment for us.
The second thing is, if you look at the SME and MSME space, while they significantly contribute to the country’s growth, they contribute to the workforce in the country. That said, they’re severely underrepresented when it comes to credit. And therefore, changing that paradigm and getting more and more SMEs and MSMEs into the credit lifecycle is a vital growth objective for us.
Specifically, when you come to the startups part of MSME, SME, which is where this programme is really looking at, we realise there are two types of startups. Some startups go from zero to one, and then startups that have built a proven business model and have to scale up from one to 100. While a lot of startups start at zero and become one. The more significant challenge happens when they scale up from one to 100. And that is where we saw the real problem.
When you look at why these startups cannot scale up, the first is that they don’t get the right product-market fit; they don’t get the resources they need, the professional resources who could come and help them scale up. Networking and mentorship are key challenges; finally, funding becomes a key challenge. So, these are the four challenges that we wanted to solve and with which we decided to launch the Kotak BizLabs programme.
Nawsarkar: I think there’s a 2017 study which identified that almost 90% of Indian accelerators failed to sustain for more than five years. And the reason for that was mentorship; the other was getting the proper network connection. So, the scale-up is a big challenge; I think this is where the Kotak Accelerator programme helps.
Q: I also want to understand from you how this accelerator programme ties into Kotak’s CSR and ESG commitments beyond sustainability and social impact. What are the broader themes or the outcomes that you’re targeting with this programme?
Nawsarkar: Let me start with the ESG aspect. In ESG, we are looking at it from an ecosystem development approach. If you look at the Kotak programme, we have a programme focused on SMEs with IIT Madras. In turn, IIT Madras has tied up with almost six other IITs, and they have set up centres across India to do decarbonisation efforts in the SME sector. So that’s one effort going on in terms of sustainability.
The other is our significant initiative, which we started last year with IIT Kanpur, where we are setting up Kotak School of Sustainability, which will lead efforts on sustainability pan-India through work in academics and research. So, it’s a considerable effort. The Kotak BizLab Accelerator programme fits in beautifully because we are looking at supporting companies in the circular economy. We are looking at climate tech. So, it is an extension of that activity and works very well from an ESG perspective.
Q: Srivardhini, you focus specifically on social impact startups. Based on your experience, what are early revenue-stage startups’ most pressing challenges? How do you see Kotak BizLabs addressing these challenges?
Jha: Startup entrepreneurship, in general, is fraught with risks. Many startups fail, and that’s the truth of it. However, many startups fail despite showing early promise. In some sense, they needlessly fail. So, we believe that providing that input with the right kind of support at the right time will help them overcome that valley of death and go through that scale-up phase more smoothly.
So, at NSRCEL, a large part of the work that we do is, in fact, around how we can help startups scale. So, these are ventures that have shown some early market traction. They may have a few customers and a little revenue, but how do we help them get to product-market fit? That’s really where we are coming at it from. So, we help these entrepreneurs rapidly iterate and arrive at a business model that can sustain them in the long run and contribute to society through job creation, GDP growth, etc.
We have been around for about 25 years at NSRCEL, so we’ve developed deep expertise in incubation. We have designed our unique methodology, so we bring this together and have also created an extensive repository of venture knowledge. So, we bring this all together and curate extremely well-designed programs. A lot of them are designed by IIM Bangalore faculty to help our ventures and our entrepreneurs get to product market fit.
Q: At IIM Ahmedabad Ventures, you have also been working with startups across stages, and there are various accelerator programmes we’ve seen, incubators, and funding support. What do you think makes this programme unique in addressing the requirements of early revenue-stage companies?
Bakshi: One of the best aspects of the programme is the fact that there is support available for entrepreneurs across the stages as they progress in the program. So, while about 10 or odd startups will be provided financial support, all through the programme, there will be some sort of support, lighter online support, for about 50 to 60 startups, which can cross the first sort of selection barrier. Then, we’ll also have pitches organised for the startups at three locations — Indore, Ahmedabad, and Jaipur.
We’ll also be getting the local angels, HNIs, etc. Then, a boot camp at IIM Ahmedabad will be at the top of the line. So, if you look closely, that’s a very important element in supporting early-stage entrepreneurs. It’s not a pure binary selection process; it’s not that either you’re in or out; even if you show some promise, online support will be provided. You could apply in the next cycle, next year.
Once you cross a certain stage, you get to pitch to investors and a select few, then go to IIM Ahmedabad for a very intensive boot camp, and a smaller shortlist out of that gets funding and portfolio support from the IIM Ahmedabad Ventures team. So, it’s almost like a funnel. We are mindful of the fact that a lot of entrepreneurs have high potential. They may not have done enough validation; therefore, they may not have made the cut beyond a certain level. But we are not rejecting them. It also helps us create a pipeline, let’s say, for future iterations of the programme.
Watch the accompanying video for the entire conversation.
