Why Startups Are Viable Investments But Not An Exclusive Focus Yet?
Wipro and Infosys Ltd have invested around 65 million dollars on 11 startups, but these new companies have not come to compromise by being in to an exclusive relation with these big names. However big the funds are, the new age startups are hesitant to come into an exclusive tie up where the concentrate on only one big company. Infosys and Wipro have recently started to back startups which are located in US, Israel and India, but these companies should not be stopping these new ventures from entering in to partnerships with other companies as well. Even if it is a rival company of these MNCs, they should rather encourage this kind of mutual association.
The Power Of Emerging Startups
This, in face, shows the emerging power of startups, a large shift from big banners to small ones, and serves to be a big threat to the multinational companies. The shift was not really an expected one for the big companies, as companies like Infosys and Wipro invested on these startups, thinking it would block these companies from outsourcing it to others. Companies like Tata Consultancy Services Ltd (TCS) and Accenture have been doing the same. But this however does not discourage their association with startups; rather it has become a rivalry thing for the companies to be associated with the maximum number of startups.
Startups Yet To Get Exclusive Attention
Despite these trends, companies do try to enforce their exclusivity on startups. Altizon Systems Pvt. Ltd.., a Pune based startup has been funded by Wipro with a qocrore funding to hold 20%stake tries to end up on a healthy tie up with the company. Altizon is a company that helps data gathering and analysis.“There is no exclusivity with any one IT service provider. We can engage with any other large IT firm, there is a level of maturity we are seeing from IT companies and this is seen in the way when they come, invest. They don’t want to stifle innovation by tying us to work with only one company.”said Vinay Nathan, co-founder and chief executive of Altizon.
Another company, Waterline Data Science Inc., a startup in US also has an interesting story. Infosys has invested 4 million dollars on this data analytics startup and the company also has a prospective relationship with Tata Consultancy Services. However, Infosys has given the complete freedom to Waterline and has announced they would not restrict the company from having tie ups with any other firm as well. Infosys has made it clear that they believe in an open ecosystem and hence shall not restrict their portfolio companies from engaging with other companies.
In fact, these big companies have come terms with the fact that the world is emerging as a huge, open and collaborative system where mutual and cross associations are not destructive, but contribute in the overall development. The companies have also understood and analysed the risks in investing on startups. Many startups fail and disintegrate, and there is a huge risk when they put in the money not knowing whether the startup will be a success or not.