Though investors have become a lot more cautious now, says Balachandran, they still place bets on concepts that have customer validation. “That’s why we encourage startups to develop pilots.” Airbus BizLab India completed its second season in India just last month, having hand-held five aviation startups through its six-month accelerator programme. Interestingly, while 137 applicants from nine countries competed for the programme, the chosen five were all from Bengaluru. Like Neewee, which specialises in procurement analytics.
“The mentors guided us to refine our business model, strategise our go-to market and identify opportunities to scale,” says cofounder Harsimrat Bhasin. It is now in talks with Airbus’s manufacturing plant in Hamburg to help identify bottlenecks.
eFlight, another startup, is in the process of setting up a partnership with one of Airbus’s subsidiaries to jointly market charts in the business jets market.
Meanwhile Stelae has partnered with Tech Mahindra to propose a digitalisation project for Airbus, apart from Rolls-Royce Aerospace and French naval contractor DCNS.
SYmbosim is in talks to run a pilot with one of Airbus’s teams even as Qualitas, the fifth startup, delivered a pilot for another team in Toulouse. Airbus BizLab, which began in France in March 2015 and made its India debut in January last year, is part of the company’s innovation strategy to speed up the transformation of ideas into businesses. The world’s second largest planemaker after Boeing is engaging with startups in a mutually beneficial way — either by integrating their solution or technology and bringing them on board as vendors or by signing a partnership deal and jointly addressing business opportunities.
Apart from the accelerator programme, BizLab will soon launch a community startups that are working in areas data analytics, artificial intelligence, machine learning, electric propulsion, space tech and solutions, cyber security and robotics. Airbus Ventures venture capital arm of the aircraft will be setting an independent investment vehicle in the country for aerospace and nonaerospace startups. The VC arm, with a corpus of $150 million, reportedly invests in seed rounds and first rounds and has funded over dozen startups across North America and Europe as well as Israel and Japan.
BizLab, says Balachandran, creates business opportunities for startups, especially with Airbus. “We believe that their time with us is worthwhile for them and for us,” he says. Aviation-centric accelerators can prove to be a blessing for B2B startups at a time when the sector seems to be at an inflection point in the country. India has become the third largest aviation market in domestic air passenger traffic. At 100 million, India has overtaken Japan (97 million) and is behind only the US (719 million) and China (436 million) in 2016, according to the Centre for Asia Pacific Aviation.
Boeing expects Indian airlines to order up to 2,100 new aircraft worth $290 billion over the next 20 years. Also, early this year, India flagged off the UDAN scheme to stimulate regional connectivity, with flights covering distances up to 800 km.
Accelerators, agree venture capitalists, derive value by co-innovating with startups to service their customers or deploy the startup’s product or services for themselves. “It’s a win-win situation,” says Satish Mugulavalli, director of technology at YourNest, an early-stage venture fund. “Enterprise accelerators like Airbus provide an excellent platform for startups. It makes immense sense for early-stage startups to be part of them so that they can validate their products and this adds to their credibility while pitching to investors.” Startups, he says, should either get a contract or do a pilot before they exit the accelerator.
Bhasin of Neewee got both — a pilot as well as a contract — during his stint at BizLab. Two-year-old Neewee makes extensive use of AI and machine learning algorithms for business solutions. However, what was badly missing in its arsenal was a potent market strategy. What compounded the problem was a set of perceptions the cofounders brought to the table — for instance, that an aspect of a solution could only be used for cracking a specific problem. They never thought that it could be extended to another market segment they had not targeted before.
“We had to unlearn and revalidate our assumptions,” says Bhasin. The Neewee team was introduced to methodologies that brought more clarity in building its sales strategy. It also got access to various internal business teams of Airbus so that it could run a couple of pilots. “We are in a much stronger position now,” says Bhasin, adding that since a major challenge for any B2B startup is long sales cycles, it becomes imperative to plan financially to sustain them.
The startups get access to a dedicated coach who helps them navigate through Airbus and connect them to all the teams in the company to develop pilots. They also become part of a mentorship programme that covers aspects as diverse as legal, sales and marketing, business model, product management and investment strategy. The six-month season culminates in an event where entrepreneurs get to meet investors, partners and potential clients.
The programme is designed for aerospace startups as well as any startup that has a product or a solution that can be adapted for the aerospace sector.
If Neewee’s market strategy got a shot in the arm at BizLab, eFlight was pushed out of its comfort zone. Arguably, India’s first trip-support aviation venture, which addresses everything from landing permits to fuelling requirements, was slipping into complacency. “We relied only on referrals for acquiring new clients,” says cofounder Prem Kumar. What was not helping was low visibility and almost non-existent brand recognition.
However, with Airbus backing eFlight, the winds have turned favourable. It has developed a comprehensive suite of services that allows airline pilots to optimise plans for fuel, time, route and weather. They can access eFlight’s cloud-hosted website, or iOS or Android app and perform calculations that give precise fuel burn based on latest winds as well as file ATC plan and receive clearance via a text message to land at any airport in India.
“The BizLab association has got us extra mileage,” says Kumar. The accelerator, he says, turned out to be much more than mentoring, technical assistance, IP guidance and marketing strategy. While networking meetings helped its fine-tune its business plan before hitting the market, its demo-day pitching helped it reach out to investors.
“Our business has better brand recognition, with clients expecting world-class solutions at localised cost,” says Kumar, adding that it is very hard to get inside B2B companies, understand how businesses think and offer best solutions. Balachandran of BizLab says B2B startups in India are coming of age. He says over the last couple of years their number has been on the rise. At the end of last year, 36% startups were B2B. For a B2B startup, looking to work with a big group is not easy because identifying the right team and people is like looking for a needle in a haystack. “This is where we come in,” says Balachandran.
Can accelerators change the life of startups in terms of getting them access to investors and business? Balachandran believes an accelerator is just a stepping stone. The entrepreneurs have to choose the right investor as the goal is not just about raising money. “It should be smart money,” he says. They should find an investor who not only understands the product, technology and solution but also the sector or industry they are looking to address, he adds.
Raghava Kashyapa, founder of Qualitas Technologies, says his stint at BizLab is just a starting point in the journey of his B2B startup. A machine vision and deep learning startup, Qualitas has a customer base that includes LG Electronics, Bosch and ITC. “This is the best time to be a B2B startup,” says Kashyap. The shine and shimmer has worn off for B2C startups and B2B is where the action is. With Airbus working closely with the chosen ones, the entrepreneurs could not have asked for a better take-off.