Rural Technology and Business Incubator: seeding start-ups | Business Line Page 1 of 2

INCUBATION ZONE

Rural Technology and Business Incubator: seeding start-ups

N Ramakrishnan

It was established in 2006 in the Indian Institute of Technology Madras to support rural and socially inclusive start-
ups.
Rural Technology and Business Incubator has so far incubated over 40 companies of which eight have moved out.
Spread over 3,500 sq ft at the IIT-M Research Park, the RTBIs focus is to incubate companies that leverage
information and communication technologies to come up with products and services that benefit the rural population
and the under-served segment of the population. The ventures need not necessarily be started by alumni of IIT-M but
should have a strong technology connect to the institute.
Target ventures
The RTBI incubates ventures in the fields of agriculture, healthcare and education. The ventures are allowed to be at
the incubation centre for five years, though in some cases it can be for a longer period since the projects have a longer
gestation period.
According to Suma Prashant, Director, RTBI, the incubator gets on an average four proposals a month, but has been
admitting five to seven start-ups every year. This year that number could go up to 10.
Over the years, there has been a change in the profile of the companies seeking admission into the incubator. Earlier, it
was the excitement of doing something for the rural population that was the motive for the entrepreneurs. Now, the
entrepreneurs have a clearer roadmap for the venture and a thorough business plan and model.
On the criteria for selection, Prashant says the RTBI has a set of parameters for basic clearance, but it is largely
intuitive after numerous interactions with the entrepreneur, on whether to take him or her on board. The RTBI helps
the entrepreneurs through the entrepreneurship forum at IIT-M and has regular visits by mentors; MM Murugappan of
the Murugappa group is one such, she says.
Apart from infrastructure at the incubator, the RTBI helps start-ups in accounting, secretarial, legal and intellectual
property rights. It picks up a stake of 2-9 per cent, depending on the nature of the business and the level of technology
support that is required from IIT-M. The maximum it will invest in a venture is 25 lakh.
Prashant explains that if co-development of technology is involved, the incubators stake will be on the higher side
compared to a company where the technology is at an advanced stage of development.
Funding pool
The RTBI gets a loan from the government which it uses to invest in start-ups. It is looking at a funding pool that can
be resuscitated and given to other companies at the incubator, according to Prashant. There are newer kinds of
ventures coming to the incubator, she says. For instance, there is a company that is into dairy management looking at
the entire value chain. There are companies that are looking at the energy space, particularly solar, and developing
indigenous products such as solar air-conditioning and solar refrigeration that can be used in rural areas.
The RTBI, according to her, has not exited any of the start-ups incubated by it. It has not yet framed an exit policy
simply because the companies take a longer time to develop and grow.
On the start-up scene, she says that as much as setting up of start-ups need to be encouraged, we should encourage
people to join them. Mushrooming of start-ups encourages people to take an aspect of a problem or a need and deep
dive it. That is exciting, she adds.
(This article was published on July 13, 2015)

Printable version | Jul 14, 2015 10:23:04 AM | http://www.thehindubusinessline.com/features/rural-technology-and-business-incubator-seeding-

startups/article7417919.ece The Hindu Business Line

http://www.thehindubusinessline.com/features/rural-technology-and-business-incubato... 14/7/2015
Rural Technology and Business Incubator: seeding start-ups | Business Line Page 2 of 2

http://www.thehindubusinessline.com/features/rural-technology-and-business-incubato... 14/7/2015