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Corporates moving with Start-ups – A Healthy Relationship
Corporates moving with Start-ups – A Healthy Relationship

February 17, 2022

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Corporates moving with Start-ups – A Healthy Relationship

2021 for Tech Start-ups: A Blog Series (2/8)

 

There was a time when corporates used to shy away from start-ups. But over time the strong start-up ecosystem growth has made them rethink their strategy on collaborating with start-ups. This thinking was clearly visible in the year 2021 when we observed heavy participation from corporates in start-up activities. Corporates leveraged multiple collaboration models and approaches, simultaneously, for leveraging the Indian start-up ecosystem

  • 1.5X higher corporate participation in the year as compared to 2020
  • 80% increase in corporate investment deals compared to 2020
  • 80+ open innovation programs

Merger & Acquisitions also saw a substantial jump from the previous year. 35+ M&A done by corporate with a major focus on product portfolio expansion and building tech capabilities. Global MNCs are also leading from the front. Over 50% of corporates, actively investing in 2021, were Global MNCs. 62% of programs are hosted by Global MNCs, with technology R&D centers in India.

From the deals perspective also, corporates were quite active in 2021. 80% more deals had at least one corporate investor, with a sharp increase in seed-stage. 17% share of all rounds with at least one corporate investor while 48% of Unique corporates were Indian MNCs. The most interesting point was 30% increase in seed-stage deals by the corporate which clearly shows their rising interest in budding start-ups.

Corporate Startup Partnership

In 2021 there have been many successful collaboration programs under different categories which have created impact:

  • Platform Evangelization: Corporates offer access to their platforms to start-ups
    • Story: Mastercard’s Start Path program helps start-ups scale by helping them build and launch new products using Mastercard’s Fintech tools and APIs.

 

  • License or Vendor Agreement: Corporate leverages start-up for internal challenges or integration
    • Story: Sastra Robotics created various robotic solutions for automated functional test of physical devices for Bosch

 

  • Joint Go-To-Market: Corporates partner with start-ups to cross-sell solutions
    •  Story: SatSure, a provider of satellite-based data, leveraged Cisco’s always-on network connectivity and IoT infrastructure for remote crop monitoring services

 

  • Co-Innovation: Start-ups and corporates collaborate to co-create new solutions
    • Story: PayU and Kreditech together launched PayU Mondeo, a cardless EMI system to finance online purchases of consumers

In short corporate involvement with start-ups is like adding fertilizer to a plant. It will only support and push its growth further.


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