Reliance Industries will soon enter into a partnership agreement with Microsoft India to incubate startups with seed capital, mentorship and technology, according to a report by Economic Times online Monday, citing an unknown person with direct knowledge of the developments. According to the report, RIL chairman Mukesh Ambani is keen that the company refresh its entrepreneurial spirit and engage fully with the country's fast-evolving startup ecosystem.
Reliance will operate through Gennext Ventures, an early stage venture capital firm it set up in 2010. RIL may fund the selected start-up in the range of Rs 50 lakh-Rs 2 crore.
Highlighting the key reasons why big corporates globally and in India are ready to fund start-ups, Rajesh Sawhney, Founder, GSF Accelerator said "R&D spends are going down, large companies are struggling to innovate (for instance Facebook, Whatsapp, YouTube even Google were independent start-ups that scaled globally and not spun out of large corporations) and finally they are struggling to get startups."
Large Indian companies have been slow to recognise the potential of start-ups, he said, welcoming the move by Microsoft and RIL to join hands as any new source of funding and mentorship is great for new ventures, he said.
The selected startups will be provided a mentor, an industry veteran to guide the fledgling business. According to people familiar with the development, Microsoft India will provide ready access to its business units within India and overseas for piloting the incubatee companies' products and services. Microsoft operates accelerators in nine countries including the US, UK, Brazil, France, Germany, Israel, China and India, where the programme has mentored close to 50 startups.