Meet The Support System And Enablers Backing The Rise Of Startups In Andhra Pradesh

“If you compare the Andhra Pradesh startup ecosystem and enablers to that of Bengaluru or Hyderabad, we still lack lots of resources. We need to get a lot of incubators and other support to the city and the state’s enabler community is already putting in many efforts towards that.” – Madhav Reddy, founder, RedMad Learnings.

Andhra Pradesh (AP) had to double its efforts to help the startups after it lost the IT hub, Hyderabad, to Telangana. While it lost many of its resources during that split, the enablers of the state took up the mantle of helping the startups. Right from schools and colleges, the entrepreneurial spirit is being fostered and nurtured in the state.

These efforts have helped lift up the Andhra Pradesh startup ecosystem tremendously. One such initiative is of the T-Hub incubator from Telangana. It’s ‘Raising Young Entrepreneurs through Conceptual Research Experience’ programme is focussing on young entrepreneurs not only in Telangana but also in Andhra Pradesh.

“Even private organisations and players have played an important role. They have acted as one of the mediums through which the Government of AP got to know the concerns and requirements of the startup ecosystem. In fact, we treat them as influencers who can enable network externalities and thereby ensure a greater number of interactions between startups for collaboration,” Pranay Siddhartha K, ex-associate director, operations, APIS, told Inc42.

“Among these private organisations are names such as TiE Amaravathi, ITAAP, CII-Andhra Pradesh and FICCI”, Siddhartha added.

Here are some of the most prominent names from this community, who have helped the state in coping and overcoming the losses that it has faced recently:

Incubators And Accelerators

Incubators and accelerators are two of the most important parts of an enabler community from a state. From helping early-stage startups fine-tune and develop their ideas and vision to helping early-stage startups scale, this community plays a vital role in many ways for startups.

“Apart from state-run incubators, most of the incubation centres in AP are based out of educational institutions, thanks to the grants by the Department of Science & Tech and Atal Innovation Mission,” Anudeep Chappa, associate director, TiE Amaravati told Inc42.

• SAI or Startup Accelerator India focusses on the early-stage startups and claims that its six-month acceleration programme saw applications of over 150 startups last year. This global innovation network was set up by Anand Govindaluri.
• Xlr8AP is a technology business accelerator powered by the Federation of Indian Chambers of Commerce and Industry (FICCI) and IC2 Institute of The University of Texas at Austin. This accelerator provides startups with training, advanced capacity-building, incubation and acceleration of tech companies into the global marketplace and more.
• Gastrotope is a joint venture of Mistletoe, GSF India and Infobridge. While Mistletoe is a Japanese investment firm, GSF India is a tech accelerator in India and Infobridge an Indo-Japan business consultancy firm. A ‘Farm to Fork’ accelerator, Gastrotope focusses on food producers (including farmers, fishermen, distributors and other stakeholders) and chefs to provide them with the right acceleration to enter the market as well as scale-up.
• STPI or Software Technology Parks of India in Vizag caters to the incubation needs of small and medium businesses in the state. Apart from a cost-effective incubation space which can host as many as 100 employees, it also provides businesses with software units to help them in their operations.
• The Atal Incubation Centre in SKU (Sri Krishnadevaraya University) is an incubator providing startups with both professional as well as infrastructural support. It is providing the startups with services such as business plan writing, mentoring, intellectual property protection, accounting and financial management services and more.
• AMTZ or Andhra Pradesh Medtech Zone is also working towards providing incubation facilities to tech startups operating in the medical sector. The state government gave 270 acres of land to set up this zone. For startups working in the zone, it claims to provide scientific facilities required to manufacture medical devices as well as over 200 independent manufacturing units.

Other prominent names in the tech incubator community include NASSCOM 10K warehouse initiative. NASSCOM had a physical infrastructure in the state but in 2019, it moved out of the state and is now virtually incubating startups, helping them interact with the right individuals and businesses.

Coworking Spaces

From the coworking community in the state are names such as:

• My First Office works with the primary aim of providing physical space to early-stage and growth-stage startups and also emphasises on building and supporting an open-source community (technical and non-technical) for developers and creators.
• NANOSPACE boasts of big-name clients such as OYO and many startups such as Design Hub, TurtleMint and others. It provides young entrepreneurs with affordable office spaces as well as networking opportunities to boost growth and market access.
• Quebexpro was founded by professionals from the real estate and customer service industry. With the aim of helping startups and SMBs from the state, it provides a wide range of fully furnished offices and office solutions as well as networking opportunities to help them grow their business.
• Sunrise Incubation Hub is a coworking space run by the state government and is part of the NASSCOM 10K initiative. Select startups get the opportunity to utilise the coworking facilities for free.

Investors And Mentors

Among the most prominent names in these organisations such as:

• Alcove Partners chooses to focus on product companies. The organisation aims at providing not only fiscal help to the startups but also provides mentoring and introductions to other investors to help them in their growth.
• iTAAP, or the IT Association of Andhra Pradesh aims to foster the growth of the IT and ITES industry in AP. To create a startup and innovation culture across the state, its members provide both investment and mentorship to tech startups.
• TiE Amaravati also joined the community of investors to help the startups in their growth and for the same, it has an Angel Network to invest in startups from AP. It caters to the funding need of the startups through TiE India Angels and TiE Global Angels.
• Govin Capital, set up by Govindaluri, is headquartered in Singapore and actively invests in startups In AP. It works on three parameters — innovate (recognising and acknowledging innovative ideas), incubate (helping startups with mentorship and go-to-market strategies) and invest (provides funds to the startups and ensures entrepreneur education).

Among the most prominent investors and mentors from the state are names such as:

• Ravi Eswarapu (Alcove)
• MV Sri Bharath (TiE Amaravathi)
• Srinivas Savaram (Alcove)
• Winny Patro, CEO and cofounder, Recordent
• Y. V. Ratna Kumar, chairman and managing director of APIMS

“Despite there being a sizeable number of angel investors, they are very much dispersed and the government is yet to conduct HNI meets to organise these individuals. Furthermore, the culture of venture capitalism is yet to be developed by projecting startups as a novel avenue for investing,” Siddhartha elaborated.

The AP Government As An Enabler

Providing startups in the state with free incubation space, market access, delegation visits to various events both within and outside India and more, the government of AP is actively trying to help startups grow.

Policies such as state’s Innovation and Startup Policy 2014-2020, which focussed on setting up incubators or accelerators, providing startups with innovation fund of INR 100 Cr and performance-linked assistance has definitely been one of the highlights.

In addition to that, the government took several other measures, such as:

• Andhra Pradesh Innovation Society (APIS) established in 2014
• Launched the Fintech Valley Vizag initiative in 2016
• Launched TiE Amaravati Chapter and Andhra Angels in 2018
• Partnership with Anthill Ventures for a market access programme called A-Scale

However, after the change in the government, the efforts and results are yet to be analysed.

“As an entrepreneur and mentor myself, I am looking for some stability in the Andhra startup ecosystem. Right now, the nodal agency for startups APIS is also not very active, I think in the last six months there have been no events or meeting of any kind from the organisation. TiE Amravati although has hosted a few.”

“We had a government change about less than a year ago and we are yet to see what changes and reforms the new government brings for the startups in the state,” RedMad’s Reddy said.