A potential TBI under NSTEDB scheme of DST

Promoted by KCT, Coimbatore

CIBI

Coimbatore Innovation & Business Incubator

Journey of Coimbatore

2

Coimbatore 1.0

• Pre-Independence

• Agrarian Economy

• Rural Society

Coimbatore 2.0

• Last 50 years

• Indigenous SME Industry

• Entrepreneurial Roots

• High Growth Urbanizing Society

Coimbatore 3.0

• Next 20 years

• Technology Powered

• Knowledge Economy

• Global Connect

Innovation &

Entrepreneurship

3

KCT Who we are …

Key Objectives

4

Seeding a grassroots entrepreneurial revolution

Seed, build and evolve a grassroots and youth centered technology intensive innovation and entrepreneurial

revolution creating enterprises, jobs, and wealth, contributing to the overall economic and social progress of the

greater Coimbatore region;

Entrepreneurship HUB to transform IDEAS to ENTERPRISES

Create a dynamic entrepreneurship hub connected to a large global ecosystem of mentors, investors, and business

leaders, where aspiring innovators, first-time entrepreneurs, ambitious small businesses, passionate graduates with

a million dollar idea, and innovative academics exploring commercial success go to … to transform their Ideas into

Enterprises;

Innovative, Impactful, Profitable, Growth Businesses

Generate robust demand from among students, professionals, small & family businesses, women entrepreneurs,

social enterprises, and academics to create a large number of profitable and scalable businesses, achieving global

benchmarks in technology impact, market potential, industry value creation, and investment returns;

CIBI First 5 Years Vision

5

on People

• Make Entrepreneurship a Primary Career Choice

• Impact across Socio-Economic segments

I

on Innovation & Business

• Meaningful, Impactful, Technology intensive Innovations

• Coimbatore a Hot Spot - World-Class Products & Scalable Businesses

II

on Institutions

• Entrepreneurship focus as a DIFFERENTIATOR

• Outcome based Technology Education - Role Model status

III

on Ecosystem

• Role model INCUBATOR - Our Practices become Templates

• Ecosystem Keystone - Investors, Mentors, Global Partners

IV

on City (Region)

• From S&T Education Hub to S&T Innovation & Business Hub

• National and Global Visibility

V

CIBI

IMPACT

6

Opportunity & Potential

7

CIBI - Technology Thrust Areas - Innovation & Business

CIBI

Thrust Areas

Electronics

Embedded Systems

Industrial Automation

Technology Services

Engineering & Industrial Design

Technology Enabled Services

CIBI - 5 Year Vision

8

CIBI - 5 Year Goals

9

Incubator Strategy & Business Model

10

11

Marketing CIBI - Ecosystem Building

Leadership & Governance

12

Section-25 Company; Limited by Guarantee

Company Name confirmation recd. from ROC

Management Team

13

Location of CIBI

KCT Tech Park

IT Park & Business/Commercial Center › Owned by the same Trust as KCT (RAF)

› Total 100,000 sq.ft space

› >2000 Employees

› Tenants: Cognizant, Ford, Firstsource (+10) IT/Business

Services

› CBE City Limits location on Highway

› Rs. 20 per sq. ft current rental income for KCT

10,000 sq.ft dedicated space (Phase-I) › Additional 9000 sq.ft (Phase-II)

› STPI Incubator (4,000 sq.ft)

› Entrepreneurship Education, Training, Development

Center (5,000 sq.ft)

14

15

Incubation Process & Policies

Project Budget & Funding Plan

CIBI Project Funds Summary for 5 years in Rs. Lacs

Year 1 Year 2 Year 3 Year 4 Year 5 Total %

Capital Cost

DST contribution 385 160 58 12 0 615 77.4%

HI contribution 180 0 0 0 0 180 22.6%

Total Capital Cost 565 160 58 12 0 795 100.0%

Recurring Cost

DST contribution1 53 50 42 25 0 170 23.7%

HI contribution2 15 21 26 29 31 122 17.0%

CIBI self-contribution3 23 40 71 127 165 426 59.3%

Total Recurring Cost 91 111 139 181 196 718 100.0%

Total Project Cost4

DST contribution 438 210 100 37 0 785 51.9%

HI contribution 195 21 26 29 31 302 20.0%

CIBI self-contribution 23 40 71 127 165 426 28.2%

Total Project Cost 656 271 197 193 196 1513 100.0%

1 DST Contribution towards Recurring Costs is deficit support for Operational Losses; 2 HI Contribution towards Recurring Costs is up to 50% subsidy on Power, Utilities, Repairs & Maintenance costs; 3 CIBI self-contribution is Revenues from CIBI Operations; 4 Operational self-sufficiency in the 5th year;

16

CIBI - 5 Yr Operations P&L

Recurring Expenditure & Income Statement (in Rs. Lacs)

Recurring Cost Items Year 1 Year 2 Year 3 Year 4 Year 5 Total

1.Manpower cost 34.50 39.00 51.50 85.00 96.00 306.00

2.Travel 6.50 6.50 7.00 8.00 8.00 36.00

3.Utility and Maintenance 30.00 42.00 52.00 58.00 62.00 244.00

4.Marketing Promotion and advertisement 15.00 17.00 21.00 21.00 21.00 95.00

5.Networking and training 2.50 3.00 3.00 4.00 4.00 16.50

6.Consumable 0.50 0.50 0.50 1.00 1.00 3.50

7.Other expenses (if any)* 1.00 2.00 2.00 2.00 2.00 9.00

8.Miscellaneous and contingencies 1.00 1.00 2.00 2.00 2.00 8.00

A. Total Expenditure 91.00 111.00 139.00 181.00 196.00 718.00

Revenue

1. Revenue from operations 23.00 40.00 71.00 127.00 165.00 426.00

2. Support from HI towards 50% of Power,

Utility & Maintenance costs 15.00 21.00 26.00 29.00 31.00 122.00

B. Total Revenue 38.00 61.00 97.00 156.00 196.00 548.00

Net income [B-A] (surplus+ / deficit-) -53.00 -50.00 -42.00 -25.00 0.00 -170.00

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CIBI - 5 Yr Revenue Plan

Self-sustenance beyond 5 Years • Increased Debt/Equity investments into Ventures sourced from Private Venture Fund (Angel/VC partners)

• Higher equity payouts & interest income

• Continued HI subsidy towards Power, Utilities & Maintenance costs

• Strategic Incubation: Sector focused, Global market access, India specific R&D for MNCs

18

CIBI Revenue Plan for 5 years (in Rs. Lacs)

S. No Revenue Source Year 1 Year 2 Year 3 Year 4 Year 5 Total % Share

1 Rental Income 1.80 4.50 6.30 8.20 9.20 30.00 7.04

2 Training & Mentoring Fees 5.00 13.00 29.00 54.00 64.00 165.00 38.73

3 Advertisement Revenues 5.00 6.00 8.00 9.00 15.00 43.00 10.09

4 Sponsorships 11.00 11.00 12.00 15.00 16.00 65.00 15.26

5 Interest Income 0.20 0.50 0.70 0.80 0.80 3.00 0.70

6 Equity Buyout 0.00 5.00 15.00 40.00 60.00 120.00 28.17

Total Revenue 23.00 40.00 71.00 127.00 165.00 426.00 100.00

Location of CIBI

KCT Tech Park

IT Park & Business/Commercial Center › Owned by the same Trust as KCT (RAF)

› Total 100,000 sq.ft space

› >2000 Employees

› Tenants: Cognizant, Ford, Firstsource (+10) IT/Business Services

› CBE City Limits location on Highway

› Rs. 20 per sq. ft. current rental income for KCT

10,000 sq.ft dedicated space (Phase-I) › Additional 9000 sq.ft (Phase-II)

› STPI Incubator (4,000 sq.ft)

› Entrepreneurship Education, Training, Development Center (5,000 sq.ft)

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Space Utilization Size (L x B, ft) Area

(sq. ft)

CIBI Office 20x40 800

Conference Room 20x20 400

Equipments Room - E & A 20x30 600

Equipments Room – TS 20x30 600

Cafeteria 20x30 600

Dormitory with Change Room &

Shower Room 20x20 400

Common Facilities – Toilet 24x30 720

Common Facilities -

AHU/AC/ELECTRICAL 18x18, 20x10 580

Common Area - Lobby/Passage 30x20,

100X5,60X10 1700

Incubatee space 40x90 3600

Total Area - CIBI 10000

Phase - II

STPI Incubator 4,000

Entrepreneurship Education,

Training & Development Center 5,000

FLOOR PLAN FOR KCT-TBI AT TECH PARK GROUND FLOOR

FREE SPACE

4000 SFT

CAFETERIA

900 SFT

CONF ROOM

900 SFT

AHU

STAIRS

FIRE

EXITOFFICE ROOM

600 SFT

INNOVATION & ENTREPRENEURSHIP

TRAINING CENTRE

5000 SFT

EQUIPMENT ROOM

600 SFT

EQUIPMENT ROOM

600 SFT

LOBBY

900 SFT

DORM &

CHANGE

ROOMS

900 SFT

LIFTS

INCUBATEE SPACE

3600 SFT

STAIRS

TOILETS ELECTRIC

SWITCH ROOM

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CIBI Core Team

Investment Policy Criteria

Entrepreneur (Founders & Management) Assessment:

Background, experience, references and credentials of the entrepreneur(s) & management team

History of professional/business association of Founders/Management Team

Financial, Time commitment; Passion for Entrepreneurship

Strong domain expertise, sector/market knowledge with practical business experience

Technology Assessment:

Innovation potential or Degree of Technology involved in the Business

Relevance to the Technology Thrust Areas broadly but specific relevance to any sub-areas

Business Assessment:

Financial viability with the capacity to service Incubator debt within the defined milestones

Growth potential based on market expansion, region/geo expansion, product line/portfolio extension etc.

Extent of Innovation in the core Technology and potential impact of its applications

Innovations in Business Model or Business Process leveraged to build higher Enterprise Value-Added (EVA)

Potential for IP Generation and scope for exits through Technology Licensing or M&A

Portfolio management imperatives and mandates

Incubator Needs Assessment:

Clear understanding of the role of the Incubator in supporting the venture at this stage

Office space, technology requirements and openness to opt-in for hybrid Incubation taking minimal space in

the Incubator

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Graduation Policy Criteria

Guideline Tenure Period:

Products Business - Min 18 months - Max 36 months

Services Business - Min 12 year - Max 24 months

Student Business - Min 24 months - Max 36 months

Graduation - Pre-Tenure

Achievement of stated goals as per defined milestones

Readiness to sustain independently (No Dues clearance)

Equity dilution or Debt repayment demands during pre funding due diligence

Graduation - On-Extended Tenure

Review and Approval by Investment Committee

Redefined goals, milestones, strategies, investments

Termination

Violation of agreed terms & conditions, conflict of interests

Legal/ethical issues from malpractices

22

CIBI - 5 Yr Funding Plan

CIBI Project 5 Year Funding Plan (in Rs. Lacs)

1. HI contribution toward existing/new land & building1 (10,000 sq.ft)** 130

** 10,000 sq.ft of dedicated floor space in KCT Tech Park (Software/IT SEZ) for Incubator space

** Additional 4,000 sq.ft in KCT Tech Park planned as Center for Entrepreneurship development, training and related

events ** Additional 4,000 sq.ft in KCT Tech Park planned for STPI Incubator

2. Contribution of HI toward Capital Costs2 50

Capital costs towards dedicated technology infrastructure including furniture, Lab Equipment, Software, Utilities,

Toolkits etc.

3. Capital Grant (Capital Costs) from DST for 5 years 615

4. Recurring Grant (support for Operating deficit) from DST for 5 years 170

5. Revenue Generated by Incubator in 5 years 426

6. Contribution of HI towards Recurring Costs for 5 years 122

Up to 50% on Power, Utilities, Repairs & Maintenance Expenditure

TOTAL PROJECT COST 1513 Private Venture Investment Fund3 200

1 Excludes the Opportunity Cost of Rs. 200 Lacs of foregone rental income in 5 years for 19000 sq.ft of

commercial space; 2 Excludes the Cost of shared lab/technology equipment amounting to Rs. 110 Lacs available for incubatees to

use; 3 CIBI (backed by KCT) taking the support of Sakthi Finance (a Sakthi Group NBFC business) to raise capital

from VCs/HNIs shall create a private venture fund to infuse debt/equity capital into the Incubated ventures;

Revenue from Interest Income and Equity Buyouts generated from such capital infusion is not considered in

this funds and budget planning exercise - Indicated to highlight the expression of intent of the HI (KCT) with the

support of Sakthi Finance to bring venture funding to the CIBI; 23

“If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning” “An ounce of practice is worth more than tons of preaching”

“Be the change that you want to see in the world”

Thank you