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A venture capitalist elaborates on a tie-up between Pontaq and London′s Royal Albert Dock which led to the creation of an innovative new UK-India Tech Hub.
Pontaq is a cross border innovation venture capital fund, with headquarters in the UK. It began its operations the UK-India Corridor, but is now expanding into the US and Canada. We take pride in our ability to scale and globalise our portfolio businesses, which is at the core of what we do, and our success in this space has been recognised by Theresa May, as she endorsed Pontaq in her keynote speech at the India Day conference on the 16th July. After almost 5 years of being in the venture capital business, it is clear to us that the main problems of our portfolio businesses are; scale, access to clients and access to markets. Since every portfolio company is having the same problems, we asked ourselves what can we do to address them, and fuel the growth of our portfolio companies We have been successful in solving this problem for our portfolio companies who want to expand into India by creating an ecosystem of partners, in both the public and private sector; we have now partnered with at least 4 state governments in India, in West Bengal, Haryana, Gujarat and Tamil Nadu, which allows our portfolio businesses from across the world to be able to penetrate any particular state should there be an opportunity. In addition, we are also partnered with a FinTech Centre of Excellence in India, jointly set up in collaboration with the central government Entity of India, STPI and the state government of Tamil Nadu; we also have access to 26,000 rural Indian villages across 27 states through Commonwealth Inclusive Growth Services, an organisation set up by one of Pontaq's general partners. As a result, we are now able to give our portfolio businesses access to a customer base of up to 250 million people, hence providing ample opportunity for our companies to scale up their activities.
At the same time, for firms which are interested in coming to the West and want to use the UK as an entry point for globalisation, we have now partnered with the Royal Albert Dock (RAD) in London. This is part of a £1.7 billion International Business District development. This has led to the creation of a UK-India Tech Hub.
As well as the UK-India Tech Hub being the first of its kind globally where a venture capital fund has partnered with an International Business District, it is also the first time in history that a UK-India tech hub has been set up in the UK. The main aim of the hub is purely to cross-pollinate technology transfer between UK and India in a bidirectional manner, thus allowing companies in FinTech, Smart Cities Tech, Artificial Intelligence, IOT, and Blockchain to be able to come into the UK from India and expand. Similarly, companies from within the UK can use this as an opportunity to scale into Indian markets.
In addition to this, the Tech Hub will give portfolio companies the chance to branch out into countries into South-East Asia, through our partners at RAD. Furthermore, the International Business District will have multi-million/multi-billion-dollar companies choosing to set up shop here in the near future. We will hence be able to give our portfolio businesses preferential access to those companies and their markets, thereby essentially massively accelerating their growth through a thoroughly streamlined business mechanism.
We believe that Indian companies looking to enter into the UK should perceive the UK as the entry point for globalisation. This is because the UK has three main advantages to offer for incoming businesses. Firstly, UK venture capital can provide funding across the entire life cycle of the company, from 0 to £100 million of enterprise value and beyond as the funding is equally spread across the spectrum and beyond. Secondly, talent; there are approximately 2.1 million people in the UK digital economy, of which a considerable proportion of this is global talent, giving a huge source of expertise to collaborate with. Finally, the UK offers considerable tax benefits and other ecosystem benefits that are openly available to new businesses from abroad, for example R&D tax credits, the lowest corporation tax of all G20 countries (which is expected to fall further) and business grants that are available in addition to these benefits. With the fundamentals of the UK economy being so strong (even with temporary pressures of Brexit), coupled with the talent pool of 2.1 million people in digital economy, there is clearly a sizeable market in the UK to be able to help scale the businesses and for the UK to be the entry point for Indian businesses into the Western world, and the new Tech Hub will only continue to add to the advantages on offer to potential portfolio businesses from abroad.
It is clear then that these recent developments will allow us to scale and globalize our portfolio companies, which as I mentioned is at the core of what we believe in at Pontaq and we have been successful in these ventures to date. That brings us to the central idea of what venture capital is; venture capital should no longer be viewed as an industry that is purely money focused; money is merely a commodity and an entry point for new firms and ideas. Venture capital is ultimately a catalyst for change, to help innovation thrive, and to create solutions to the global problems we face today. For this reason, we at Pontaq call ourselves “venture catalysts”.
Prem Barthasarthy is the Managing Director of Pontaq.