Chennai, or the SaaS capital of India, is fast becoming one of India's key startup hubs.
Between January and June 2021, Chennai attained the 6th spot among the eight Tier-I cities in terms of number of deals (17), as well as amount of funding ($73.8 million) raised, data by YourStory Research reveals.
Download YourStory Research's report on funding trends in the Indian startup ecosystem in H1 2021 here.
From January 2015 to June 2021, Chennai startups have raised a total of $1.6 billion across 199 deals. While the maximum concentration of deals is at the early stage, the volume of funding is highest at the growth stage.
Amid the pandemic, investors have also been testing waters in different niche sectors, giving rise to the number of early-stage deals.
According to Rohini Prakash, Founder, Tomorrow Capital, one of the primary reasons is the Tamil Nadu government's aggressive promotion of the rising startup ecosystem through the presence of a large number of Special Economic Zones (SEZ) in Chennai and business and trade laws that offer a competitive and hassle-free environment for startups and new businesses.
'œThis, coupled with fast-paced infrastructure development and a strong IT talent base, is attracting more startups to the region. The lower cost of living in Chennai '” compared to cities like Delhi, Mumbai, or even Bangalore '” is another factor,' she adds.
Download YourStory Research's report on funding trends in the Indian startup ecosystem in H1 2021 here.
Here are the 12 early-stage Chennai-based startups to watch out for:
Agnikul Cosmos is building India's first private small satellite launch vehicle. Its vehicle, Agnibaan, is a rocket that will be capable of carrying up to 100 kg of payload to low-Earth orbits up to 700 km with a plug-and-play engine configuration.
In February 2021, the company successfully fired it's higher stage semi cryogenic rocket engine '” Agnilet. This is a unique rocket engine because it is completely 3D printed as a single component in a 3D printer, in one run of the printer.
Rocket engines usually have 100s of parts in them '” starting from injectors that inject fuel into the engine to the cooling channels that cool the engine, and the igniter that is necessary to ignite the propellants. Agnilet was designed in such a manner so as to encapsulate all of these into just one piece of hardware. So, this automates the making of an entire engine.
Agnikul has been testing engines at a smaller scale or those that were not 100 percent additively manufactured since September 2018. However, this is the first time they have demonstrated firing of a semi cryogenic fully 3D printed rocket engine.
'œLarge customer demand and talented management combined with the viability of tech such as 3D printing, which wasn't possible 20 years ago, as well as an ecosystem geared to support startups development amidst government tailwinds, makes the perfect storm come together to make spacetech investing in India viable finally,' says Vikram Godse, Managing Partner, Mayfield India, one of the investors at Agnikul.
BeyondSkool believes '˜knowledge without skills is education half given', and hence follows a learning approach of upskilling and not tutoring. Built on the premise of developing higher-order thinking skills of innovation and creation, the startup aims to facilitate holistic cognitive development of children's intelligence quotient (IQ), emotional quotient (EQ), and creative quotient (CQ) simultaneously.
The team aims to bridge the gap in the current education system that only offers subject knowledge. It targets students in the age group of 5-15 years.
As of July 2021, BeyondSkool is already at an ARR of $1 million. It has conducted over 10,000 classes with 1,000+ paying students since its inception. It has registered students spread across more than six countries and 70+ cities. The course completion rate for these students has been as high as 96 percent.
'œWe have an expansion plan in place, which is an aggressive distribution growth strategy across supply, geography, and channels. Coming from consumer products and large distribution backgrounds, we believe in a multi-channel approach to take the growth momentum forward across geography. We are targeting an ARR of $25 million within the next two years,' said Payal Gaba, Founder and CEO, BeyondSkool.
Blaer Motors is an NIT-Trichy incubated startup based in Chennai.
Founded by four engineering students, Blaer Motors builds and develops technological solutions in the transportation and mobility space. The company focuses on developing clean, smart, and efficient solutions, which are cost efficient to meet the needs of the consumer.
Blaer has been working on hybrid and electric drivetrain solutions for two-wheelers and three-wheelers and collaborating with multiple OEMs for commercialising the drivetrain solutions.
It is currently strengthening its R&D team and focusing on technology development. It aims to further optimise its hybrid technologies for motorcycles and expand its product portfolio into three-wheelers and LCVs.
'œBlaer Motors' hybrid technology will help in both enhanced performance and fuel efficiency of the vehicles. India being the world's largest two-and-three-wheeler market, this innovation will have a huge impact on the domestic market,' Vasantha Kumar, Head Business Development, ABAN Infrastructure Ltd said.
ePlane Company was founded at IIT Madras campus with a mission to transform the mobility space. The startup is building electric planes that can be used for 10X faster commute within cities at a similar price to road taxi and can also be used for moving cargo in remote and rural areas.
ePlane has built a small scale prototype, the e200, with a dedicated team of 10, which it is now expanding to 25. The electric plane will be a two-seater with a 200 kg capacity. It can travel upto a 200 km range in 14 minutes, piloted by a human, and easily certifiable. The team is looking to do a taxi service launch in multiple cities by September 2024.
'œWe at Speciale Invest, believe in the founders' deep-technical insights that are leading them to build a roadmap of electric planes and associated critical infrastructure! Our experience of working in transportation across previous investments in Ultraviolette, Vogo led us to better understand the potential ePlane has to build a multi-billion category within cargo and passenger transportation' said Vishesh Rajaram, Managing Partner, Speciale Invest, one of the investors in ePlane.
Fabheads is a startup focused on automated manufacturing in the carbon fiber (and other composites) space. It developed India's first 3D printer capable of printing with composite fibre materials.
Currently, the startup is offering design and manufacturing services to drones, robotics, and shipping companies across India. A few of its portfolio companies are E-plane Company, Synergy Marine, Planys, and ADA (Aeronautical Development Agency). It has also onboarded a couple of Singapore clients and recently started pilot operations across Asia.
The biggest value addition made by Fabheads to their clients is offering the flexibility to use their in-house certified raw materials. This factor is of extreme importance in the biomedical and aerospace industries as the clients go through decades of research to certify their materials.
Fabheads serves a large carbon fiber parts market, which is a global market of $60 billion with an annual CAGR of 14 percent.
Ankur Mittal, Co-founder, Inflection Point Venture, believes that Fabheads' proprietary technology can compete with the best in the world in a space dominated by only few large well-funded startups/publicly listed companies and where the use cases have the potential to grow exponentially in the near future.
'œWith the founders' background from ISRO, we believe their expertise in robotics and 3D technology will help the company grow faster. Our network and the funds raised will help them achieve their ambition to scale across the world,' he adds.
IIT Madras incubated Spacetech startup GalaxEye is committed to building the future of Satellite Image Acquisition globally with an aim to enable businesses to make better decisions and perform operations efficiently via Space Technology.
It is currently working on building an efficient smart satellite constellation providing a completely new dataset at a high cadence and resolution. Thus, enabling businesses and governments to make data-driven decisions from derived insights.
GalaxEye aims to launch the first satellite by early 2023. The company develops technologies that work in space, monitoring Earth and envisions to monitor outer space as well, while also accelerating the growth of space infrastructure enabling multi-planetary evolution.
'œWe have invested across the Indian spacetech landscape, and find the vision and approach of GalaxEye very different and disruptive. They would bring non-linear efficiencies in the (estimated) $400B satellite imagery market (2030), and disrupt the satellite's unit economics,' said Vishesh Rajaram, Managing Partner, Speciale Invest, one of the investors in the company.
Grinntech specialises in Lithium-ion batteries for EVs and energy storage systems. It recently announced the launch of the new Finch and Monal series of batteries and the order to develop a larger pack incorporating advanced thermal management and utilising Grinntech's proprietary battery management system for a US based OEM.
After emerging from the incubator in the IIT Madras Research Park in September 2020, Grinntech quickly expanded its product lines focussing on a range of electric vehicles including two-wheelers, three-wheelers, and farm-tractors/LCVs. Their new R&D and manufacturing facilities in Ambattur Chennai now employ seventy engineers and staff.
'œWe are working with a select number of OEMs in the EV farm-tractor and LCV space. We had founded Grinntech on the basis of technical competence and we are confident that this aspect will be appreciated by Indian customers who are increasingly looking for PLI-compliant solutions and suppliers,' said Nikhilesh Mishra, Co-Founder and Director.
Jidoka Technologies is a new-age startup in the field of automated cognitive inspection for manufacturing. It has recently launched India's first-of-its-kind solution to address the growing challenges in the quality control (QC) processes of the manufacturing sector.
The QC solution primarily consists of two parts '” first being the hardware platform that comprises three models, namely, Huron for large volume complex products, Tigris for flat and lightweight products, and Miyake for manual load and unload with selective checking.
The second part is a software platform called Kompass that connects real-time decision-making to the state-of-the-art AI, in order to create an end-to-end system for visual defect detection.
Jidoka works with manufacturers across automotive, pharma, general manufacturing, electronics, textiles, and printing industrial domains currently. The solution is made available to customers both in India and overseas markets.
Currently valued at $3 million, its areas of expertise in deep tech, including data augmentation, AI/deep learning, machine vision, real-time QC, online/standalone automation, high-speed monitoring, and data analytics with customised user experience.
Its state-of-the-art automated cognitive QC solution enhances the quality and efficiency of QC in the manufacturing process. It harnesses and mirrors human reasoning in defect detection delivering 98 percent or higher accuracy in the QC process consistently and a significant increase in throughput, besides reducing wastage by 30 percent.
It aims to expand its services across global markets of the UK, Europe, and Australia, besides serving across the Indian subcontinent, North America, and Southeast Asia by 2025.
'œThere is an increasing demand for automated QC solutions to drive speed and efficiency in manufacturing. Considering the challenges faced by the customers, we are constantly updating ourselves through research and development to develop relevant solutions,' Sekar Udayamurthy, CEO and Co-founder, Jidoka Technologies said.
Raptee Energy is working on applying powertrain solutions to build next-gen electric motorcycles. The team is aiming to get its first motorcycle road-ready and production-ready.
The startup claims that its software-driven motorcycle supersedes its petrol-powered counterpart in terms of safety, performance, reliability, longevity, cost of ownership, and comfort.
The motorcycles are expected to hit the market in early 2022. The startup has already accumulated bookings for seven months' worth of production through the pre-booking portal on its website. Apart from motorcycles, it also supplies the state-of-the-art Electric Vehicle Control Units (eVCUs) that the firm has developed for its motorcycles to commercial vehicle manufacturers as white labelled plug and play products as part of its OEM solutions.
'œEVs are the future. The demand for electric motorcycles is growing, especially in the premium segment. We are glad to see the Raptee team venturing into such a future dominating market with such advanced technology supported by product design innovation," said the investor MA Gaffar, a MIT Alumni, and an entrepreneur from Hyderabad.
SuperOps.ai is a professional services automation (PSA) and remote monitoring and management (RMM) platform. It unifies PSA and RMM tools from the ground up as a single platform powered by intelligent automation (IA).
Further, it is helping MSPs with several benefits, including centralising control, minimising training requirements for technicians, and streamlining work processes, among others.
Akarsh Shrivastava, Vice President, Elevation Capital, said, 'œMSP (managed service provider) software market is at an exciting inflection point. Challenges brought on by the shift to the cloud '” coupled with strong tailwinds of remote work and distributed teams '” have pushed MSPs to adapt faster and become more productive and agile. Superops.ai will give small and mid-sized MSPs an easy-to-use, modern tool, which will not only allow them to be more efficient but also serve their clients better as they embrace the cloud era.'
TenderCuts is an omnichannel D2C meat and seafood brand with a vision to provide clean, hygienic, and quality meat and seafood to customers. It began its operations with one store in Chennai with one category '” chicken. Today, it has 27 stores across Chennai and Hyderabad and offers chicken, mutton, seafood, marinades, pickles, and eggs.
Customers can buy the freshly cut and freshly packed meat and seafood from its nearby stores or can order online via its app or website. Once a customer places an order for a meat product, the order is directed towards the nearest TenderCuts store in the neighbourhood and the butcher slices the meat/seafood only after the order is received and it is not cut and stored prior.
All its meats and seafood are halal-certified and strictly follow the FSSAI and WHO guidelines from sourcing till last-mile delivery to the customer's doorstep.
Recently TenderCuts expanded its store line and online delivery to Bengaluru with the launch of three stores and is looking to add 10 more by the end of this fiscal year. Currently TenderCuts is performing at an ARR of Rs 160 crore and has grown exponentially since its inception. The growth has been almost around 100% year on year and given the current rate of expansion, TenderCuts is looking at a similar growth chart in the upcoming years.
'œWe believe that TenderCuts has an opportunity to leverage its robust supply chain of farmers and fishermen and its omnichannel strategy to efficiently cater to the mass market,' said Siddharth Parekh, Co-founder, and Senior Partner, Paragon Partners, a lead investor in TenderCuts.
Wylo addresses people's evolving needs for tailored and targeted social networks.
It claims to be clocking a monthly user growth rate of 30 percent, and has over 130 communities. Going forward, it is looking to scale this number to 300 plus by 2022, along with half a million users.
Recently, community driven fitness brand Fittr also acquired a minority stake in the startup.
'œThe key genesis behind Wylo was that most people are unable to follow their interests and passion usually due to lack of exposure on different topics and relevant networking. The platform helps to bridge the gap,' said cofounder Omnath.
** The startup names have been mentioned in alphabetical order and do not share any kind of ranking.
Edited by Saheli Sen Gupta