Sindhu Hariharan – TNN – The Times of India – October 7, 2018 13:31 IST — After the terrorist attack on the Pathankot air base in 2016, it was Bengaluru-based startup Tonbo Imaging that partnered with the armed forces to boost security with advanced imaging and night-vision systems. The startup, Tonbo Imaging, founded in 2008 by BITS-Pilani alumni Arvind Lakshmikumar, makes imaging and sensor systems that are mounted on tanks, drones and guns so soldiers can see better at night across distances.
The defence sector is one of the largest importers and a stronghold of legacy public entities, but startups have got a foot in the door in recent years, capitalising on the need for technology and innovation and on startups’ ability to deliver quickly.
The government too has streamlined policies — revisions to the defence procurement policy in 2016 made loud and clear the country’s preference for ‘Make in India’, and procurement procedures have been simplified. Now, projects not exceeding a development cost of Rs 3 crore are reserved for medium and small scale enterprises (MSME), like startups.
Recently, defence minister Nirmala Sitharaman launched the Defence India Startups Challenge (DISC), a call to individual innovators to solve 11 key challenges faced by the armed forces. The winners get a government grant, and the possibility of equity investment in the future. Five incubator partners — IIM-A Centre for Innovation Incubation and Entrepreneurship, Society for Innovation and Entrepreneurship at IIT- Bombay, T-Hub Hyderabad, Forge Coimbatore, and IIT Madras’ Incubation Cell — were signed up to drive DISC.
“Defence projects, by nature, are capital-intensive and have a high gestation period, making them less than ideal for startups,” says Sanjay Jaju, joint secretary, department of defence production. A challenge like DISC, says Jaju, is the first step to create an enabling environment for startups.
It was at a similar contest in the US that Defence Research and Development Organisation (DRDO) spotted IIT-Bombay grads Ankit Mehta, Rahul Singh, Ashish Bhat and Vipul Joshi and their sophisticated drones. The four set up up ideaForge in Mumbai in 2007, and have been designing and making makes unmanned aerial vehicles (UAVs or drones) for border security, anti-terror ops, and disaster management.
Lakshmikumar of Tonbo Imaging says dealing with the government has been largely a good experience with payments being “absolutely prompt.” Tonbo sells directly to the Indian Army, Navy and Air Force, and also manufctures for defence forces in 25 countries. “We started selling our products in the US and Europe, and that’s how we captured the attention of our defence officials,” he says, urging startups to think global, and sell to other industries, in order to scale.
Axio Biosolutions, a medtech enterprise that counts Ratan Tata-led RNT Capital as an investor, works with over 500 military groups in the country, including the army, BSF, NSG and paramilitary forces. The company’s emergency bleeding control solution (a chitosan patch) saved lives of soldiers during the 2016 surgical strike. Leo Mavely, founder and CEO, says India’s defence sector must learn from the best practices of its global counterparts when it comes to dealing with startups. “The allocation of budgets and pace of decision making for medical products is a challenge in our country,” says Mavely, who also supplies the US Army.
Ankit Mehta, co-founder and CEO of ideaForge, admits that procedures tend to be “more protracted” while dealing with the government, and says “it’s definitely a challenging industry to work in.”
Sunderarajan Varadan, co-founder and CEO, Aadyah Aerospace, a provider of aeronautics, space and defence engineering solutions, has a similar view. “While the policies are really good, on the ground you still need to have proved your credentials to sell to the government,” he says, calling it a “chicken-egg situation” for startups. Varadan says that an initiative like DISC can help change this, and is glad that “the government is now opening its doors wider.”
Tushar Chhabra, co-founder and CEO, CRON Systems, a startup in Delhi making IoT-based intrusion detection systems, says defence-tech entrepreneurs need to start understanding the consumer. CRON Systems works with the armed forces on perimeter security, and has developed patented products after spending considerable time on the borders. Chhabra says a meeting with the right officials is no longer difficult to land.
Vishwanathan Sahasranamam, co-founder and CEO of Coimbatore’s Forge Accelerator (that’s already hosted one meet-up for defence startups) sees this as the key phase. Embracing a co-creation model, on the lines of Israel’s defence sector is “the need of the hour,” he says. Industry players are watching how the government navigates its way through the entrepreneurial interest, and how startups approach the sector.
“The challenge would be sifting through the large number of entries that come in for DISC, and judging the ideas purely on merit,” says Lakshmikumar of Tonbo Imaging, which has already been awarded “approval in principle” under the DISC challenge. ideaForge too is a recipient of such approval, and founder Mehta encourages startups to take advantage of the transforming sector. Aadyah Aerospace’s Varadan says DRDO should use DISC as a tool to build a talent pipeline.
The sector is not one anyone can just jump into, considering the technical prowess and patience needed, as well as the absence of champion investors. Mehta says the sector is a “genuinely hard place to survive, and entrepreneurs need a lot of tenacity and passion.” As Forge’s Sahasranamam puts it, success depends on how well the current dialogue between startups and armed forces goes, one where entrepreneurs “understand the voice of a soldier,” and the behemoth government sector indulges the needs of young innovators.
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