These Startups are Defying All Odds in India's Defence Industry
Presently, India ranks third in terms of total defence expenditure after China and the US.
Everyone must have heard "Our soldiers are fighting on Siachin' and yet no one wants to do anything for them. Well, as this debate continues in our comfortable couches, there has emerged a pool of "doers' who are adamant on working and less of talking. These newbies are filling the gaps in the technological and financial loops, simultaneously tapping on the industry that is going to swell up to a whopping Rs 83 lakh crore in 2022.
Now that the Government has extended the FDI in the defence sector up to 100 per cent - 49 per cent via automatic route and beyond that, through Government approval - Indian private sector is all decked up to grab a piece of the pie. The country is finally greased to "manufacture' and not import from foreign lands to meet the demands in this sector. Subhash Bhamre, the Minister of State, Ministry of Defence, "We need new start-ups in this sector because technology keeps changing. We can achieve our goals in manufacturing defence equipments only with private and public collaboration."
Presently, India ranks third in terms of total defence expenditure after China and the US. However, unlike these countries, India imports around $5.5 billion worth of equipments from Israel and Russia. "Sometimes, the products coming from abroad are of no use to the jawans on the ground. Why does he have to press five buttons on the machine while being on the ground?" asks Tushar Chhabra, Founder, Cron Systems.
He says it has been a monopoly for a long time and nobody questioned the user-interface of the guns and softwares being used by the soldiers. For Chhabra, it all began with him reading a news piece about how India had imported advanced border fencing for millions of rupees and he thought, "Why doesn't India make its own fencing?' And that's where he found his business opportunity; making a lazer wall that would be operated by one micron (operating system) and monitored by two Spartan drones. But even with technologically advanced equipment, these start-ups are just small fishes in a big pond that has bigger fishes. The government is not very keen on inviting start-ups to big seminars and workshops of the defence sector.
"The big conferences, instead of inviting new people and find a solution to the gaps, become a marketing and PR excercise for the big companies in the ecosystem. Instead of taking pride in collaborating and assembling in India, we must try to manufacture products that we make in India," told a source in the Ministry of Home Affairs on the condition of anonymity. Secondly, India already has big business magnates such as TATA and Reliance working with the global defence giants such as Boeing and Airbus.
"The established companies do not encourage start-ups to work with them," told Shaju Stephen, Founder, Aadyah Aerospace. Supporting his claims, Stephen also added that every company participating in the Request for Proposals along with these companies has to have a certain financial standing and experience.Purely out of accident, Aadyah Aerospace was started by Shaju Stephen along with a team of five co-founders, namely V Sunderarajan, Pradeep Kumar, Sabu Joseph, Amarnath Reddy and Varun Kurup.
Aadyah Aerospace builds electro-mechanical actuators, control actuation systems and electro-optics systems for missiles and launch vehicles. According to International laws, India's maritime forces have to monitor some 1.67 lakh sq km — the size of Andhra Pradesh state. Pruthvi, developed by Saankhya Labs, helps the small and big vessels in the Indian waters regarding real-time monitoring, tracking and reporting. This is done through a Pruthvipowered system installed in the boats for monitoring purposes.
Other start-ups like Samhams Technologies, Idea Forge and Omnipresent Robotics are also exploring the sector by creating better quality drones that could be used even in clouds and fog. K K Rathi, Managing Director at IndiaNivesh Fund who invested in Innefu Labs also affirms, "The future of Defence ecosystem is technology and there will be surely a huge demand of startups that are into data analytics. Plus, this is the right time to get into the sector as the competition is not as aggressive."
There is ample scope for new companies to fill several gaps around finances, big data, weaponry, technology etc. But a very innovative entrepreneur saw his business opportunity in healthcare. Leo Mavely, Founder, Axio Bio-solutions, who realized the importance of the untapped healthcare market in defence, says, "I researched on the market and found out that over-bleeding has been the major reason for death of maximum troops of the US in their last four wars. Same is the case for India or any other country."
Axiostat is a sterile, single-use haemostatic dressing intended to be used for temporary control of moderate to severe bleeding wounds due to on-field injury. Made of 100 per cent Chitosan Haemostatic bandage, the product has been supplied to close to 100 battalions in India alone. A bio-tech engineer essentially, Malvey said, "Recently we supplied around 100 units in an emergency in J&K at 2 am through our efficient distribution channels. They have also shipped around 350,000 units worldwide."
According to news reports, the third world war will be fought in cyberspace and not on the field. To counter the hackers and surveillance by hostile countries, Tarun Wig and Abhishek Sharma co-founded Innefu Labs which takes care of the cyber-space security of the Defence systems.
Innefu Labs is in the process of making a customized product for the government and BSF (Border Security Force) by the name "Prophecy Octopus'. This product is built on Palantir's model. "Data without any intelligence is pretty much garbage. We work on artificial intelligence and use that data to predict any mishap that could happen in the near future for our client. We analyze the behavior of the consumers, form a pattern and then work on what should be worked upon."
Breaking The Ice
Every entrepreneur has diverse range of functions in the sector. However, the only thing that binds every one of them is the fact that it is a Herculean task to crack the nut open. The first task is to enter the eco-system itself. Narrating how hard it was for the Cron System's founder to get an appointment with the person in-charge (in army) he said, "They called me in the evening, made me wait for the entire night in a chilling weather with his Saint Bernard. He came out for a morning run at 5 am, when I was allowed to have a word with him. I was running along with him, giving my presentation simultaneously."
Parag Naik, the Saankhya Labs founder, believes that cracking this Government sector is one of the toughest tasks. "I think it's about a combination of your work, rapport and influence. I was on very good terms with ISRO. So I can say that it wasn't that tough for me," adds Naik. Saankhya Labs has sold around 1000 units to Defence since 2007 and about 40,000 units worldwide. The droone making compnay, Samhams technologies, also shares their experience of cracking this sector.
Abul kalam Khan , the Founder, said, "It's very hard for the newly start up to get the chance for the demo in the defense sector. We set up a link with the retired defense persons, who operate consultancy firms to show out the ways to the guys like us to have the chances for the demonstration of our product in government sector."
Interestingly, not just India but other countries are also working on their defence-tech start-ups. The US Military has recently launched a venture capital program to pump money into start-ups. The Lieutenant General Syed Ata Hasnain, a retired Three-Star General of the Indian Army, said, "We are looking for new indigenous companies who have in-house technologies and can actually make in India."
(This article was first published in the November issue of Entrepreneur Magazine. To subscribe, click here)