In 2014, Reliance launched GenNext Innovation Hub (GIH), an accelerator program in partnership with Microsoft Ventures, based out of Mumbai.

Reliance Industries Limited (RIL) is India’s largest conglomerate with business interests in hydrocarbons, retail, telecom, media and healthcare. RIL is also in the process of launching the largest pan India 4G network based telecom services, called Jio. RIL also has India’s largest organized retail footprint.

Innovation is Everywhere analyses the objectives, format and results of this open innovation initiative.

 

 Objectives of GenNext Innovation Hub

This initiative is driven by a need to adapt to the digital, as India recently recorded the fastest growth in APAC for smartphone penetration, now beyond 35% market share of all mobile phones. The Prime Minister Modi has been pushing its “Digital Plan for India” and “Startup India” relentlessly this year.

“If you look at the history of conglomerates in the last 10-15 years, many industries have become obsolete”, states Vivek Rai Gupta, managing partner at GenNext Ventures.  Usually not fast movers, these family-based giants are controlling important parts of the local economy across several industries through political and family networks.

Other than the investment opportunities, working with startups will rejuvenate corporate thinking, create a collaborative environment between startups and its own ecosystem of businesses, and potentially partner for large-scale enterprises.  “The startups can receive validation and mentoring from Reliance ecosystem of businesses as also investment opportunities. They can explore Proof-of-Concepts and validate their technology to address scale-up challenges” explains Amey Mashelkar, mentor-in-residence at GenNext Innovation Hub.

Another key objective is to create win-win partnership possibilities for Reliance Jio platform”. The company has already invested $12bn in the 4G network Reliance Jio.

 

Format of GenNext Innovation Hub

Corporate accelerators programs have mushroomed in the last few years. But GenNext Innovation Hub has greater ambition. “What is lacking is a national platform that seamlessly brings together all stakeholders and also provides the resources Indian startups need to be successful” explains Vivek Rai Gupta.  This is the direction, but not the priority at the moment, as stated Amey. “That’s what we are aiming to do through GenNext Innovation Hubs across the country. Nothing yet has been decided, but that’s the direction. For now, we want to go deeper in one-one engagements with startups and Reliance businesses”

GenNext Innovation Hub

 

Partnering with such a powerful company in India makes a lot of sense for global startups to leverage a deep knowledge, large infrastructure and huge network to enter the Indian market.

The corporate accelerator programs stands out by:

  • Providing an opportunity to startups to interact with internal Reliance business mentors who don’t just teach scale, but operate at scale. GenNext Innovation Hub gives challenges to startups and helps them think big and be bold in taking risks.
  • A strong association with a tech company and its mentors to operate the accelerator. Microsoft Ventures India’s role is to help GenNext identify, shortlist and on-board promising startups and power the accelerator program. They also provide startups access to software and technology advice. Microsoft Ventures is working with startups since 2008.
  • The decision not to invest during the first batch. This shows the conglomerate’s first objective is to understand and explore technology and market trends, to inject entrepreneurial spirit within the organization and to create business partnerships. This decision allows startups to stay independent and not be restricted in their growth. Reliance still plans to invest but after the program and selectively in the future.
GenNext Innovation Hub

Where GenNext Innovation Hub stands in the amount of resources commitment by corporates and startups. A graphic from Nesta report “Winning Together”.

 

How does it work?

A 3 years partnership with Microsoft Ventures India signed in September 2014, with the result to create “GenNext Innovation Hub” whose duty is to accelerate batches of startups. The first 4 months program accelerated 11 startups (out of 267 applications). The program is open to startups from anywhere and welcomed 13 startups, with 2 startups from  Israel for its Fall 2015 batch (out of 450 applications received).

GenNext Innovation Hub

The 11 startups from the first batch of GenNext Innvation Hub.

 

  • The program includes:
    • 11,000 square feet fully state-of-the-art accelerator in Mumbai
    • Access to Microsoft Ventures technical resources i.e. Azure cloud and BizSpark program.
    • Access to Reliance mentors from Jio, Retail, Procurement, HR, etc.
    • Access to test-beds within their business units and with their partners.
    • Access to an advisory team of 20-25 members that include local tech star entrepreneurs and investors.
  • At the end of the accelerator program cycle, GenNext will invest strategically and selectively in some of these startups. “Decisions on investment will be taken after the program, which will take place twice a year over a four month stretch each, is over”.


Results

The group is aware that results will be visible mainly on the long run.

The selected startups from GenNext Innovation Hub have won business deals from companies like Fortis, Flipkart, Raymond, Credit Suisse, DotCabs and Snapdeal.

CarIQ, founder Sagar Apte, has found the support of such a powerful player very useful: “It helped us get rid of our ‘frog in the well’ mentality, allowing us to dream bigger and aim higher”.

Another startup from the first batch, LogiNext (big data analytics), has been able to sign with 15 paid clients thanks to the acceleration, including local e-commerce leaders Snapdeal and Flipkart. They also raised $500k from the Indian Angel Network following the Demo Day. A few months back, LogiNext raised $10 mn. from PayTM, the largest Indian mobile payment platform, along with forging a strategic relationship with them. “We have been uniquely successful in helping a startup succeed not just through our internal mentoring efforts but helping LogiNext receive funding for scale-up” explains Amey.

GenNext Innovation Hub

For now GenNext has not invested in any of the 11 first batch startups but has facilitated follow-on investment for 30-40% of them through their network and introductions to VCs.

“For the second batch, our intent is to invest. For the first batch, we were not ready, we were learning. In second batch, we think that we can assimilate the learnings from the first batch and start to internally line up so that we are in a position to start investing”.

These investments would cover any industry the startups are working in, and wouldn’t need to be directly linked with Reliance’s 4G network opportunities: “We are very flexible. At the end of the day, what determines the ticket size is the opportunity because we are making investments as a corporate, by and large we will take only strategic stakes, and we will pick up 15-30% stake”.

Going forward, apart from the regular 4 months accelerator program, GIH will introduce a new Go-To-Market program for slightly more mature companies with 3-4 weeks intensive engagement that will include pitching to RIL Business Units, receiving validation / feedback, working on stakeholder development based on real-time feedback and fine tuning scale-up plans. Along with internal RIL mentoring, startups will also receive mentoring from other key customers, entrepreneurs and investors in the particular domain that the startup is in. GIH will also seek an opportunity to invest in such strategically aligned startups.

GenNext Innovation Hub