Jet, Set, Go
How Airbus is mentoring aviation startups in its first accel
erator outside Europe
The problem is not money but scalable ideas, says Siddharth
Balachandran. He should know something about ideas that can take flight. He
heads aviation giant Airbus's global business accelerator in Bengaluru -the
first outside Europe and only the third after Toulouse, France, home to the
company's headquarters, and Hamburg, Germany, where it has a jumbo factory.
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.
Cash Carrier
Apart from the accelerator programme, mme, BizLab will soon
launch a community y of B2B startups that are working in areas such as data
analytics, artificial intelligence, machine learning, electric propulsion,
space tech and solutions, cyber r security and robotics. Airbus Ventures es
-the venture capital arm of the aircraft maker estment will be setting an
independent investment vehicle in the country for aerospace and d 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, In dia's first
trip-support aviation venture, wh which addresses everything from landing per
permits to fuelling requirements, was slippin into complacency. “We relied only
on ping refe referrals for acquiring new clients,“ says cofou founder Prem Kumar.
What was not helping w low visibility and almost non-existent it was bra
recognition.br brand H However, with Airbus backing eFlight, the i 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.
ETM3SEP17
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