Ramping up efforts to make the Indian state of Telangana a preferred IT destination, the state's government announced the opening of India's largest technology startup hub "T-Hub" on the outskirts of Hyderabad earlier this month.
The project is being developed in public private partnership (PPP) mode by the Telangana government, in collaboration with the International Institute of Information Technology (IIIT), Indian School of Business (ISB), and NALSAR University of Law. Chairman Emeritus of Tata Sons, Ratan Tata, inaugurated the facility in the presence of several dignitaries.
T-Hub is the first complete ecosystem in India that offers total support to new startups and is already tied up with 20 venture capitalists. Renowned VC firms such as Ineda Venture Group, Kalaari Capital, Peepul, and Sequoia have expressed support to the project.
The first phase of the project, a six-storey building located on the sprawling International Institute of Information Technology campus, can accommodate up to 150 startups. Lack of such a facility forced many local entrepreneurs to shift their base to Bengaluru city in the neighbouring state of Karnataka in the past.
There has been tremendous response to the $6 million first phase, which is offering seed funding, working space, mentorship, and opportunities to network in one place. In fact, more than 300 startups have lined up to get registered so far, but only half were successful while the remainder were assured of assistance in future.
In order to avoid political interference, the government decided not to become involved in the functioning of the facility, which will be under the supervision of a board of directors comprising CEOs of IT companies such as Tech Mahindra and Cyient (formerly Infotech), technocrats, academics, experts, and legal luminaries, who will choose the startups based only on the merit of their ideas.
Telangana IT Minister, KT Rama Rao, said that the government would set up an innovation fund with 100 crore rupees ($16 million) to fund the startups. Of this, the government's share will be 10 percent and rest will be in the form of contributions from the private sector.
"The innovation fund will be to the tune of 100 crore rupees. We want to increase it to $100 million or over 600 crore rupees in the coming years. We will fuel Hyderabad's rise to become one of the top tech startup cities in the world," the minister said.
A software engineer who worked in the US between 2001 and 2006 said that venture capitalists in Silicon Valley, including those from Hyderabad, evinced interest to pitch in for the innovation fund. "We will render all assistance to the facility until it becomes self-sustaining. It will make revenues by leasing out office space to startups, VCs, angel investors, and others," he said.
The second phase of T-Hub is set to be completed in less than three years at a cost of about 150 crore rupees ($23 million), with a campus of its own spread over 300,000 square feet. By 2020, it plans to incubate 1,000 startups and generate 3,000 jobs.