Hyderabad's T-Hub: How the premier incubator is turbocharging India's start-up ecosystem

A chance encounter with a neighbour. An unexpected conversation, and off the two guys went to beat their start-up idea into shape. Once ready, Sandeep Bommireddi and Sravanth Gajula—Co-founders of AdOnMo that operates digital-out-of-home ad boards—pitched their idea to the mentors at T-Hub. But as fate would have it, their first application was shot down.

But the co-founders who had met while working for Microsoft, were not ready to give up just yet. They knew that getting into T-Hub—that was operating from a 70,000 sq. ft facility located within the International Institute of Information Technology (IIIT) Hyderabad campus back then—would prove to be a game changer for their start-up. After months of persistent efforts, the start-up was finally admitted into one of the cohorts that T-Hub 1.0 was running.

“We had to apply multiple times to get into T-Hub. It took us a good seven to eight months,” Bommireddi says, adding that the opportunities inside the hub exceeded their expectations.

Although the programmes being offered by T-Hub at the time had not evolved into the structured set of modules it offers today, the budding entrepreneurs found enough guidance that they could give live demos of their product at the investor interactions and industry connects that T-Hub organises regularly.

The big break for AdOnMo came in 2018 when a delegation from IKEA—that included Jesper Brodin, CEO of Ingka Group that operates the IKEA stores—was visiting the facility. Back then, the Swedish furniture giant was preparing to launch its first store in India, in Hyderabad, and the start-up got an opportunity to showcase its products to IKEA. Within three months, AdOnMo, still in the pre-revenue stage, received an assignment to run IKEA’s marketing campaign for the launch.

“Because IKEA came in as a client, we were able to convince investors to raise money. They [IKEA] connected us to their marketing agency GroupM, who took us to their clients, and it started a ripple effect. We got connected to Amazon through them. Today IKEA and Amazon are among our top clients,” says Bommireddi, who has also received funding from Zomato. Today, AdOnMo has grown into a 900-member organisation with 14 offices nationwide.

A RUNWAY FOR GROWTH

Bommireddi is not the only one who dreamt of getting into T-Hub, set up by the Telangana government to incubate start-ups. There are many like him who aspire to get into a facility like T-Hub, which is gradually turning into one of the largest and most vibrant start-up innovation campuses in the country. And not without reason.

The 10-storey facility is a captivating blend of contemporary architecture and design that encourages collaboration. With its vibrant colours and bustling ambience, the place is purpose-built to inspire young minds. T-Hub CEO Srinivas Rao Mahankali, fondly called MSR, says the structure was designed to shatter the stereotype of dull government buildings, by making it swanky, with an aura that exudes new-age appeal.

Built on part of the 18-acre plot of land in Hyderabad’s HITEC City, T-Hub can accommodate 800-1,000 start-ups and 2,800 seats at full capacity. Currently, it engages with over 500 start-ups, of which 341 operate from the facility, occupying 1,157 seats. The ground floor houses two banks—ICICI Bank and HDFC Bank—that offer banking services and collateral-free loans exclusively to T-Hub members. The first and second floors have a number of experience centres (such as Apple’s) and Centres of Excellence (CoEs) from firms such as Apollo Tyres, Hexagon, NPCI, etc. But a flashy facade void of impact renders the structure irrelevant. MSR says T-Hub delivers on the foundational principle—of crafting an unrivalled start-up ecosystem—by empowering and synergising innovation across start-ups, corporates, academia, and the government.

The Telangana government has already invested Rs 400 crore, while MSR indicates that the remaining portion needs another Rs 40 crore to finish. Set up as a non-profit, T-Hub already has enough cash flow to run its operations, with nearly 40 per cent of its revenues coming from the co-working rental business, and corporate programmes bring in another 40 per cent. Start-up incubation programmes account for about 14-15 per cent, while the rest comes from its funding desk.

To be sure, T-Hub is part of the larger innovation network in Telangana that includes WE Hub—dedicated to women entrepreneurs; T-Works—for rapid prototyping of hardware products; Telangana State Innovation Cell (TSIC) and Research and Innovation Circle of Hyderabad (RICH), among others.

These entities are non-profits, with independent boards, separate managements and reporting structures. And they are all self-sufficient. “Hyderabad is known as the city of pearls. With a view to building a new-age state, the government has created a set of entities like a string of pearls that are focussed on innovation and entrepreneurship. T-Hub is the crown jewel in that piece,” says MSR.

As of now, six of the 10 floors in the nearly 600,000 sq. ft building are operational, while the heart of T-Hub 2.0’s operations is on the third floor where various teams, including the leadership, sit. It also houses the offices of partners such as RICH and TSIC. The fourth floor is dedicated to co-working, while the fifth floor is designed for events with a 400-seat auditorium. The sixth floor houses various incubators, including a 500-seat AI incubator run by the central government’s Department of Science and Technology. The remaining floors are likely to be operational by 2023-end.

With start-ups at the heart of this mission, T-Hub runs five different incubation and acceleration programmes that help ventures through their early-stage inflection points. These include Masterclass, an idea readiness programme; Rubrix, for product readiness; Lab32, for market readiness; T-Angel, a funding preparedness and assistance programme that culminates in a pitch to investors; and finally a scaling programme. All these are 100-day programmes, with each running three cohorts every year.

“In total, we run 15 programmes every year. Every programme has an upper limit of 20 participants, meaning we churn out about 300 high quality start-ups every year,” says Anish Anthony, Chief Delivery Officer of T-Hub.

It charges a fee of about Rs 50,000-75,000 for the programmes that are heavily subsidised by the revenue T-Hub makes from other verticals. With over 700 applications received for each cohort, admission into the programmes remains extremely competitive, with only 3 per cent of them getting approved, while over 40 per cent of the start-ups are from outside the state. “T-Hub in general is very selective,” says Bommireddi.

PREPPING FOR TAKE-OFF

Beyond the organic investor fundings that originate from its many initiatives, T-Hub actively mobilises funds from diverse sources such as government grants and schemes; T-Fund—the state government’s dedicated start-up fund—along with its network of venture capital firms. A co-investment fund with a target of Rs 2,000 crore, T-Fund has partnered with angels, angel networks, and VCs to invest around Rs 3-4 crore among eight start-ups within a year of its launch.

“T-Hub has a rigorous screening process that ensures the start-ups showcased to VCs are of high quality and align with their investment thesis,” says Kiran Chandra Kalluri, Fund Partner of Dallas Venture Capital. “T-Hub provides a diverse range of start-ups across various sectors, offering a wide array of investment opportunities for VCs.”

While T-Hub works with over 50 VC funds, and 150-plus angels to enable capital for its portfolio, seven VC funds, including Dallas, Kalaari Capital, Hyderabad Angels, and Pavestone Capital have their offices in the campus. Collectively, its programme alumni have raised around $800 million so far.

T-Hub’s innovation doctrine also focusses on corporate programmes that help foster connections between established companies and start-ups. These open innovation modules help fast-track innovation within corporates by connecting them with relevant start-ups working to solve specific challenges. These start-ups also benefit from the market access opportunities, mentorship from industry experts, and potential funding and investment connections that such collaborations bring. T-Hub has done about 600-700 corporate innovation programmes in partnerships with firms such as Amazon, Qualcomm, Hindustan Aeronautics, etc.

“For corporates which are focussed on innovation, but don’t know how to get there quickly, we want to bring open innovation to them. We work with them and design innovation approaches that they may not be familiar with,” says Sujit Jagirdar, Chief Innovation Officer of T-Hub. “We are creating sector-focussed themes to drive innovation, and also helping them build internal muscle to enable transformation within.” In addition, several corporates, including Cyient, Tech Mahindra, and Suzuki Motor have taken dedicated seats there to foster swift and effective connections with T-Hub’s start-ups.

Not only that, the incubator also serves as a hub for Consulate General-level foreign delegation visits that are aimed at facilitating market access and knowledge sharing for its start-ups. Anthony says T-Hub hosts an international government delegation every three days. For instance, recently Consul Generals from the US, Turkey and Sweden visited the facility in the same week. Even the Indo French Chamber of Commerce and Industry has taken up space in T-Hub and the French Consulate has shown interest in setting up an office there.

Such collaborations not only lend credence to the viability of a model like T-Hub, but also help the start-ups land their first few clients. For instance, Sunil Maddikatla, CEO and Founder of healthtech start-up BlueSemi, says he received his first international order even before launching international sales, from a visiting German parliamentarian. “I received a call from MSR one fine morning asking me to present my idea to a group of German delegates. I did a live demo of my product and one of them loved it, and asked if I can send a few, so he can show it to his colleagues there,” he says. Maddikatla is now in the process of shipping 25 units of his non-invasive blood-glucose level measuring devices to Germany.

Meanwhile T-Hub’s partnerships with academia is aimed at fostering a problem-solving and innovation-oriented mindset among college students. It helps build incubation centres in academic institutions and trains their faculty to be incubation managers. Since the launch of the programme in November 2022, it has successfully launched three such projects, with three more in the pipeline.

T-Hub also runs accelerator programmes for various government bodies, such as the Ministry of Defence and the Ministry of Electronics and Information Technology. It also manages the accelerator programmes of the state governments of Bihar, Odisha, Maharashtra, Uttar Pradesh, and Goa, as well as foreign governments like Kazakhstan, Bangladesh and the Maldives.

TAKING TO THE SKIES

“T-Hub has played a pivotal role in attracting investments to the state. Its reputation... [has] led to a substantial inflow of funds into Telangana’s start-up ecosystem,” says K.T. Rama Rao, Minister for IT for the Government of Telangana. “T-Hub has evolved into a remarkable centre of innovation that contributes significantly to employment and economic growth in Telangana.”

MSR says, T-Hub has played a central role in creating a friendly environment for start-ups. He says the goal is to grow their number to 20,000 within the next five years, and generate around 100,000 jobs.

B.V.R. Mohan Reddy, Founder Chairman and Board Member of Cyient Ltd, and a Founding Director of T-Hub, says the organisation will continuously adapt to the evolving needs of start-ups. “As the start-up landscape evolves, T-Hub will continue to be a driving force, empowering the next generation of entrepreneurs and contribute to India’s vision of becoming a global leader in innovation.”

Needless to say, T-Hub’s pioneering approach and state-of-the-art infrastructure have set a new benchmark for start-up ecosystems, making it a formidable contender to surpass other Indian cities and emerge as the premier destination for entrepreneurs to incubate their ideas into viable businesses. 

@binu_t_paul