How well does OYO live in Bangalore

Bengaluru - where visions become products

India's economy as a whole is weakening, but the startup metropolis of Bengaluru is vibrating. It apparently attracts a breed of people who want more than make money.

Some things are different in Bengaluru. As in most Indian cities, the streets are notoriously congested, but they are greener. Restaurants do not let the sensitivities of the Hindu traditionalists slow them down and confidently put beef on the menu. The future is also being tested at the airport: Electronic facial recognition is being tested for passengers. And while in other cities spindly henchmen drag heavy loads through the maze of streets, past people sleeping on sidewalks, the otherwise omnipresent poverty in India in the former Bangalore is barely visible.

The metropolis with a population of 10 million sees itself as a laboratory in which solutions for the future are designed. More than 400 international companies have set up research centers here, including from the fields of biotech, IT and space travel. The companies tap into the resource pool of resourceful minds who are trained at Bengaluru's best universities. The city in the state of Karnataka has produced a start-up scene since the turn of the millennium that plays in the top international league in the tech sector.

Cosmopolitanism is practically celebrated in the city. As in New York, there is a Broadway and a Times Square. Many of the Indian workers that Bengaluru attracts have returned to their homeland from America. For years, some observers have noted a reverse brain drain.

Fight against breast cancer

As in Silicon Valley, in Bengaluru you will find that kind of entrepreneur who wants more than just making a lot of money. The entrepreneurs claim to use innovations to bring global problems closer to a solution. Geetha Manjunath is dedicated to the fight against breast cancer. "Worldwide, 500,000 women die every year because they are not examined in time," says the computer scientist. Most die in developing countries: In India, the survival rate after a breast cancer diagnosis is only 50 percent, in America it is 90 percent.

According to Manjunath, the high price for mammography in India prevents early detection, among other things. The $ 50 cost discouraged even middle-class women from consulting. In addition, mostly only city hospitals have the appropriate devices. In the huge Asian empire, however, more than half of the population lives in rural areas.

Her company Niramai, founded in 2016, developed a diagnostic device that works similar to an infrared camera. It creates a thermal profile of the upper body - and thus shows areas with an above-average body temperature, which can indicate breast cancer. Manjunath emphasizes that her method is complementary to conventional mammography. "But we can reach women who, for reasons of cost or because they live in a remote location, never see such high-tech equipment." So far, 12,000 Indian women have been examined using the new method. The 52-year-old opens her laptop in the windowless meeting room and clicks through a few pages. It stops at a comparison that was presented at a scientific conference in Amsterdam. According to the table below, the “Niramai method” achieved a higher accuracy than mammography in a test with 147 patients.

Although her diagnostic method - it reduces examination costs by more than half - has so far only been used in India, the company director and co-founder sees enormous potential in Asian and African emerging countries. She mentions Indonesia and the Philippines, which together have more than 360 million inhabitants. Manjunath also looks to America, where Niramai has already received nine patents. In addition, the young company wants to apply for approval from the American health authority FDA. On the wall of the meeting room someone has drawn a map with arrows pointing in all four directions. There does not seem to be a lack of ideas, plans and visions. Manjunath unpacks the infrared camera from a photo bag: It costs a tenth of a mammograph.

A leap into the unknown

The decisive factor in swapping a well-paid job as research director at Xerox with the high risks of being a startup was the death of a cousin who had breast cancer. She was faced with the question of either climbing the career ladder comfortably, gaining more money and seniority or making a contribution to saving lives.

It is probably thanks to the persuasiveness of the four-person founding team that Niramai raised 3 million dollars in capital within three months after the go-ahead in India. Meanwhile, the Japanese and Singaporeans are also among the group of investors. Only the day before the interview did she fly back from Stockholm, where a Swedish company makes the infrared camera. The Indian also met with potential donors in Scandinavia. Niramai actually broke even at the beginning of 2019, but investments in highly qualified workers are now due.

Indian startups have difficulties in financing the initial phase in particular. In general, however, there is enough capital in Bengaluru, emphasizes one interlocutor who advises start-ups. It is challenging to build a reputation, especially in the health sector. Therefore, cooperation with established companies or awards from renowned institutions help. Niramai is now working with Philips. In 2018, the start-up was selected by Google for a funding program together with three other Indian startups.

So far, Niramai has created 35 jobs. The startup is a tiny piece of the mosaic in Prime Minister Narendra Modi's economic master plan. Modi recognized that the millions of youth who throng the labor market year after year will only find employment if India becomes more entrepreneurial. In 2016 he launched the “Startup India” initiative with Brimborium. Among other things, it is intended to lower the administrative hurdles that every founder struggles with in India. In order to never misplace spectacular targets, the Indian government would like to see around 50,000 startups grow up by 2024; as if this could stimulate a weakening economy. There are currently 22,800 registered startups - only these are entitled to tax breaks and support money.

However, the total contribution that startups can play in stimulating the labor market seems modest. Last year, 2.6 percent of the newly created jobs were in startups. In the current year, new start-ups are forecast to generate an increase in jobs of 200,000 to 250,000.

How much the state startup initiative brought is controversial. In Bengaluru, the bon mot is that the most promising companies do not thrive because of the state, but because they have learned to assert themselves in the face of a bureaucracy that is sometimes grueling. Company founders like Manjunath consider the psychological effect of initiatives that strengthen entrepreneurship to be more important than material support. Appreciation for people with innovative business ideas has risen under the Modi government. "Nobody would have married a co-founder of a startup before," jokes the married entrepreneur. A career with a solid company or with the state was considered desirable. Manjunath in Bengaluru is by no means alone in making this observation.

View from space on the smallholder

Amardeep Sibia also dared to leap into the unknown. After 16 years at the investment bank Goldman Sachs, Sibia switched to the startup Satsure. With a team of 30 people, he evaluates satellite images of agricultural areas in India and creates detailed harvest statistics. The buyer is, for example, a bank that has to assess a loan application from a farmer. If he wants to grow grain A on his field, the bank receives data on the presumed yield. If the farmer selects type B with poorer growth prospects, the debt interest rises or the bank rejects the loan application.

Satsure obtains its images, which are updated every six days, from satellites of the European Space Agency ESA and the Indian space agency Isro. This enables the success of cultivation to be observed even on small areas of 10 by 10 meters. And theoretically, a lender can check whether the farmer actually cultivated type A grain.

Meanwhile, Satsure does not see itself simply as an extension of the banks. Sibia emphasizes that the data processed by him help the farmers after a bad harvest year so that compensation can be paid out more quickly. An insurance initiated by the government entitles farmers to compensation payments if the harvest yield falls at least 10 percent below the long-term average. Often the payments drag on for months because government agencies and insurers are at odds with one another over controversial data. "We can provide evidence," says Sibia, while he straightened his mustache. In one state, thanks to satellite images from Satsure, it was possible to settle a deadlock between an insurer and a regional government.

The 47-year-old CEO explains the business model of his startup in a mundane meeting room of a coworking provider, where various companies and freelancers share office space. "Like other startups, we want to concentrate on developing our core business." Sibia doesn't have to deal with landlords or the maintenance of a coffee machine. And above all: Once the startup takes off, the office space can be expanded quickly and unbureaucratically. The company, which specializes in agricultural data, is currently putting out feelers to the Russian market.

Competition from other cities

India's startup metropolis is meanwhile being challenged by other Indian cities: The capital region of Delhi with Noida and Gurugram primarily attracts companies in the service sector; among other things, the hotel operator Oyo has become active. With a market capitalization of $ 4.3 billion, it is one of India's roughly 20 "unicorns", a startup whose valuation exceeds the $ 1 billion mark. In the economic center of Mumbai, many startups are orienting themselves towards the needs of the financial world. Promising latecomers are Pune and Hyderabad. With the slogan “Bye Bye Bengaluru, Hello Hyderabad”, the chief minister of Andhra Pradesh brought the metropolis in southern India into position.

Regardless of the growing competition, Bengaluru has maintained its position as the tech metropolis of India - and has retained a healthy sense of self. “Startups are also growing up in Boston,” says an insider. "But the great music is still played in Silicon Valley."