Tata Elxsi Sets up a Business Incubator

Published: Aug 10, 2013 07:05:57 AM IST
Updated: Aug 7, 2013 05:14:24 PM IST
Tata Elxsi Sets up a Business Incubator
Image: Indiapicture

Technology services companies across the country face what its executives call ‘a linear growth’ problem: The more they grow, the more they have to hire. Managers worry about logistical problems associated with larger teams. Also, investors and stock markets tend to give a premium to companies showing non-linear growth—the kind that does not involve bulking up staff.

Typically, companies use solution accelerators, automation and portfolio changes to achieve this. Tata Elxsi, a Bangalore-based Rs 622-crore design services firm, has taken a different route by setting up a business incubator.

The concept isn’t new—it started in the US as a way to encourage entrepreneurship. In India, incubators were mostly associated with academic institutions. In recent years, a variant of incubators called accelerators is taking off, driven by the private sector.

Tata Elxsi’s initiative, incub@TE, is different from all these, says Rajesh Kumar, VP, Strategic Initiatives. “We are more focussed about business than academic incubators, and our programmes are much longer than those of a typical accelerator [which last about three months]. The idea is to help create companies that will help us strategically.”

Tata Elxsi benefits from a 10 percent equity stake. The selected start-ups get 18 months of ready-to-use infrastructure, dedicated mentors and help from Elxsi’s marketing and business development teams.

Elxsi, which recently signed up its first startup, a telecom firm called Big V, expects to incubate 30 companies in the next three years. If it succeeds, it might just pave the way for other mid-sized companies.

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(This story appears in the 23 August, 2013 issue of Forbes India. To visit our Archives, click here.)

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  • Ravi Kiran

    Well done Tata Elxsi. Other [particularly non-tech] companies should take a cue and set up accelerators for their own employees. This may be the smartest way of not having lose your smartest employees, who will go away and set up their own anyway.

    on Aug 11, 2013