T-Hub too pricey for new startups?

Hyderabad: During the inauguration of the country's largest tech incubator, IT minister KT Rama Rao had proudly declared, "Walk in with an idea and walk out with a product". However, he may have to rethink his words as a mere 10% of the 130 startups housed by the state government's T-Hub belong to the ideation stage (during which a prototype is built) while over 40% are at the growth stage (where products are ready to hit the market).
The facility, say industry insiders, is often not even an option for early stage startups as they find it difficult to cough up the steep rates charged by the incubator. Also posing a problem is the lack of space in the 60,000 square feet facility, which accepted only 130 of the more than 400 applications it received.
However, this has proven to be a boon for several private incubators and co-working spaces near the city's IT hub. While these may not boast of an impressive line-up of mentors, they offer networking spaces at much cheaper rates.
While the cost of a cabin space in T-Hub can range anywhere between Rs 55,000 and Rs 65,000 a month, the same is available at a private incubator for Rs 5,600 or less.
"The inauguration of the T-Hub has definitely given a boost to the startup work culture in the city and brought together a scattered set of innovators, mentors and investors. However, the facility is not affordable for early-stage startups. The spaces also got filled very quickly by other startups in the growth stage," said Anurag Parepally, co-founder of Co.Lab.Orate, a private incubator located in Kavuri Hills, Madhapur.
A similar concern was aired by Vivek Sampara, founder of Our Hub, a private incubator/co-working space located at Madhapur, which has around 10 startups operating out of its premises and will soon expand its network of venture capitalists and investors.
"There is limited space available for startups as the T-Hub is still in the first phase. Due to this, a lot of rejected applicants have opted for private co-working spaces ," said Sampara, who set up Our Hub nearly four months ago.
As an alternative, budding entrepreneurs in the city, who cannot afford to operate out of the T-Hub, have booked single desks at 'cheaper' private incubators to gain access to facilities such as corporate banking, accounting and common software solutions, said an industry insider on condition of anonymity.
Telangana IT secretary Jayesh Ranjan, however, disagreed with the claims. He insisted that the state government's facility offered spaces for much lower prices than the existing market value.
"For instance, if a startup was looking to buy space in a commercial office space, it would cost them 40% more than the price charged by T-Hub. Apart from the monthly rent, the facility doesn't charge the startups for anything else. Along with an absolutely free one gigabyte internet speed, T-Hub also offers several intangible and priceless benefits, like the unique experience of being part of a community of startups and a set of well-known mentors and investors, whose guidance is readily available," he said.
QUOTES
The inauguration of the T-Hub has definitely given a boost to the startup work culture in the city...However, the facility is not affordable for early-stage startups. The spaces also got filled very quickly by other startups in the growth stage
- Anurag Parepally, co-founder, Co.Lab.Orate
If a startup was looking to buy space in a commercial office space, it would cost them 40% more than the price charged by T-Hub. Apart from the monthly rent, the facility doesn't charge the startups for anything else
- Jayesh Ranjan, IT secretary