May 13, 2015
Startup Studio is a new initiative from Startup Village, India’s first incubator in the PPP space. Startup Studio will be the umbrella under which multiple accelerators FinTtech-focused, telecom-focused and IoT-focused are run. The maiden initiative is India’s first FinTech-focused accelerator in partnership with Federal Bank. Federal Bank would be supporting the selected startups in developing innovative products for the bank. The studio will have in-house experts to guide the startups through the whole process, starting from idea validation through product development and testing. Startup Studio has also tied up with key partners from the sector to mentor these startups during the programme. Startup Studio has received over 90 applications from across India.
The FinTech studio program could witness equity investments of up to $42,000 for each startup. This fintech accelerator program would bring in the following advantages:
As part of the FinTech accelerator program, startups are being provided with exclusive development kits. Out of the 90 applicants, 5-10 would be shortlisted for the actual program initiatives.
We also plan to give product ideas which are potentially good ideas to build for the indian market, to these startups, if they are not able to come out with a great idea on their own. This is important as choosing a right idea and right market initially itself is very important for success, said Manoj Krishnan, Head of Startup Studio.
The Focus on the FinTech Sector by Startup Studio
Considering the banking sector in India, a lot of innovations are coming into the mainstream. Innovations are affecting the way people pay, handle cash, transfer money, etc. A recent study by Viacom in the US showed that the youth feel that banking is at the highest risk of disruption. In the era of smartphones, they feel that banks as we traditionally know them are not relevant anymore. India with its smartphone penetration and the state of its banking sector is a prime case for disruptions to impact its financial sector. Startup Studio aims to aid in the FinTech disruption with this program.
The Differentiating Factor that Startup Studio Brings
For the FinTech edition of Startup Studio, the relationship with Federal Bank is a key differentiating factor. Federal Bank is providing the selected startups with access to their APIs to develop products for the bank’s platform. This is the first time any bank in India is doing something like this. Consider the case from the UK where Barclays is partnering with Techstars to run a FinTech accelerator, but nothing of this sort exists in India. The Federal Bank has a cross-functional team in place to interact and guide the startups through various phases of product development, testing and acceptance requirements so that the startups can atleast have a working prototype which more or less meets all the stringent deployment requirements at the end of the accelerator period.
Another benefit to participating startups is that Federal Bank would deploy products that they like. This solves one of the biggest problems of startups; finding a key launch customer. The startups would also be integrated within Startup Village, India’s first incubator in the PPP space, and have access to the whole ecosystem which would also help them throughout the programme and beyond, said Manoj Krishnan, Head of Startup Studio.
The Monetization Model for Startups Under the Program
Each selected startup will get a guaranteed lookin by Federal Bank. This virtually solves the startup’s problem of finding a key launch customer as Federal Bank would deploy interesting products. After an exclusivity period of 90 days from app deployment at Federal Bank, the startups are free to approach other institutions and sell the product. This ensures that startups can build on their revenue streams further. Also, during the demo day, the startups will be introduced to top VCs and Angel investors from whom they could get possible funding.
More Enhanced Partnerships to Take Things Ahead
Startup Studio wants to accelerate the transition from a Commerce 1.0 space to a Commerce 2.0 space so it would be partnering with players which impact each of the nodes within the monetary ecosystem. This includes banks, merchants, payment gateways, alternate payment providers, etc.
We plan to focus on addressing the challenges in the commerce space as we complete a few seasons of the FinTech accelerator. This sector will cover all the various nodes in the monetary ecosystem like buyers, sellers, money exchange mechanisms, access to money, last mile friction, etc. and work on addressing the challenges that affect these various nodes, said Manoj Krishnan, Head of Startup Studio.