BENGALURU: Accelerators and incubators specialising on financial technology startups are increasingly coming to India, with 2016 witnessing the launch of several of them, from Startupbootcamp’s local edition and a Swiss Re programme to Zone Startups and Rainmatter.
They expect to see global products emerging out of the Indian financial services and insurance industry. Such solutions could have the potential to be replicated in markets similar to India, such as Latin America and some south east Asian countries like Indonesia and Malaysia.
Startupbootcamp, which has fintech accelerators in cities like New York and London, entered India after setting up its Singapore chapter. “We saw a lot of Indian applicants when we set up our Singapore accelerator, that’s when we finalised on entering the Indian market. We are expecting to see around 300 applicants with many of them offering innovations revolving around alternative lending and payments,” said Co-Founder Nektarios Liolios.
The accelerator, which has partnered with banks like ICICI Lombard and RBL Bank in India, takes a 6% equity stake in the short-listed startups that enter its programme. The innovations that the startups come up with will be integrated into use cases for the banking partners. “We are definitely expecting to see global products emerge out of the Indian market that can be replicated in Latin American and south east Asian markets,” said Liolios.
It expects to short-list 10 fintech players for a three-month programme beginning in December. Companies and banks usually provide an annual fee to the accelerators for managing such programmes, while aiming to either acquire the participating startups at the end of the session or turn them into business partners.
“We work with corporates on mandates to set up an accelerator programme, they focus on sponsoring everything for the selected startups from their accommodation and travel to space to work. While we receive an annual fee by the corporates, they can on-board startups as partners or vendors after a successful proof of concept or acquire them,” said Ajay Ramasubramaniam, Director of Zone Start-ups India.
If neither of the two takes place, the startup is likely to raise funds on its own and work solo. Zone Startups India recently partnered with Barclays and Axis BankBSE 0.57 % to start accelerator programmes, and expects the ideas that come out to have a global market.
“For instance, one of the biggest problems (in the financial services sector) would be financial crimes or fraudulent activities. We are expecting to see solutions from our big data and analytic players through predictive analytics or some newer innovations. These kind of use cases can be global,” said Ramasubramaniam.
“In the Barclays programme, each of the 10 startups are working with Barclays chief executives in different markets globally to get an idea of the technical applications.” Global reinsurance provider Swiss Re recently launched an insurtech accelerator focusing on internet of things products, expecting to see innovations ranging from sensors detecting issues in large machinery to devices like wearables.
The company, which received more than 80 applications, offers no equity grant and aims to either acquire the startups or on-board them as partners. Rainmatter, a fintech incubator launched by Nithin Kamath, founder of discount brokerage firm Zerodha, is open to receiving applications 365 days a year, unlike traditional incubators. But it has a stringent admit policy. It has admitted just half adozen startups so far since starting operations in 2015.
Source: The Economic Times
Image Courtesy: BankNXT
