INDIA'S STARTUP SAFETY NET

At a time when founders are finding it increasingly difficult to secure early backing, incubators & venture studios are playing a more visible role

- SUGANDHA MUKHERJEE

INDIA'S STARTUP ECOSYSTEM is going through a period of adjustment.Funding has become harder to raise, especially for early-stage companies, and investors are spending more time examining business fundamentals. While venture capital continues to back a small set of fast-growing companies, many founders are finding it increasingly difficult to secure early support.

This matters because of the scale of the ecosystem. According to Tracxn, India has more than 620,000 startups, but only about 33,000 of them are funded. The country has produced 125 unicorns, but these represent only a tiny slice of entrepreneurial activity. For the vast majority of founders, venture capital is not the first or most accessible source of backing.

It is in this space, between idea and investability, that incubators and venture studios are playing a more visible role. They are offering something traditional investors often do not: time, structure and hands-on support at the earliest stages. As brand strategist Ambi Parameswaran observes, incubators often feel more approachable than venture capital firms, which founders tend to perceive as large, monolithic and intimidating. In incubators, money is often secondary to guidance on people, strategy and execution.

Budding businesses

One example of this evolving model is Foundery, a new 90-day residential venture studio in Alibaug, Maharashtra, co-founded by Zerodha’s Nikhil Kamath and retail veteran Kishore Biyani.