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Yes Bank Nmims devil's advocate
- 1. Campus: NMIMS, Mumbai Team: Devil’s Advocate 1. Ashwin Jain Mobile: 9971063087 Email Id: ashwin.jain15@nmims.edu.in SAP Id: 80101150236 2. Mayank Agrawal Mobile: 9930840608 Email Id: mayank.agrawal15@nmims.edu.in SAP Id: 8010150037 3. Harsh Tewari Mobile: 7829545405 Email: harsh.tewari15@nmims.edu.in SAP Id: 80101150574
- 2. Contents Vision Statement ..................................................................................................................................................................3 Innovation Strategy..............................................................................................................................................................3 Stakeholder Map ..................................................................................................................................................................3 Roles & Responsibilities of stakeholders ..........................................................................................................................4 Process of selecting startups...............................................................................................................................................4 Startup Journey at CoE........................................................................................................................................................5 Proposed CoE Advisory Council.......................................................................................................................................6 Strategy to align with other CoE’s at T-Hub....................................................................................................................6 Marketing Strategy to promote the CoE initiative ..........................................................................................................7 Timeline.................................................................................................................................................................................8 Financial Analysis................................................................................................................................................................8 Annexure 1: Article of Intent..............................................................................................................................................9 Annexure 2: Types of Fin Tech Startups.........................................................................................................................10 Annexure 3: YES Bank services & their usage ...............................................................................................................11 Annexure 4: Startup initiatives by various Banks globally..........................................................................................14 Annexure 5: Startup India progress report ....................................................................................................................15 Annexure 6: Recent accelerators in line with the Startup India Campaign...............................................................16 Annexure 7: Opportunity benefit analysis .....................................................................................................................17 Appendix 8: MOU details for COE & other Stakeholders ...........................................................................................18 Appendix 9: Need Identification For Start-Ups.............................................................................................................18 Annexure 10: Financial Analysis of marketing campaigns..........................................................................................19
- 3. Vision Statement Creating a sustainable environment for FinTech Start-ups to grow in India & helping them to revolutionize banking methods of today. Yes Bank envisages to drive its open innovation capabilities through this program. The strategy also entails to devise new collaborations with the upcoming innovators in the banking field and to stay in the forefront of the new banking era. Innovation Strategy Yes Bank will be launching a FinTech Ecosystem Program powered by an accelerator partner using the T-Hub infrastructure. The 5 month program will have 2 batches of 10 startups each working in the FinTech space. The accelerator partner (Village Capital) will provide the executional experience of an accelerator program and Yes Bank will help in industry integration of the start-up. A crucial plan will be to form a separate arm of Yes Bank – “Yes Bank FinTech Ventures” with a corpus fund of INR 125 crores, with the vision of working for possible collaborations with the FinTech world. This corporate arm will also be given an option to invest in the start-ups inducted in the program through a special Demo Day. Stakeholder Map
- 4. Roles & Responsibilities of stakeholders Process of selecting startups As shown in the figure, the broad parameters to identify the startups by the selection committee will be 7 fold The Selection Committee will have representation from Village Capital & Yes Bank innovation team One independent observer, an expert in FinTech space shall also be part of this panel Some unconventional parameters will also be included in the process such as amount of bootstrapped funds & possibility of customer churn
- 5. Startup Journey at CoE We have divided the strategy into 4 phases – Pre – Induction Phase (Jan 17 to Mar 17): This stage will involve reaching out to the accelerator partner and T-Hub to work out the modalities of the MOU. The program formulation detail will be drawn out in this phase. Phase – 1 (Apr 17): This stage will involve two major steps – Marketing of the program & smooth induction of the startups. Marketing details are provided in the subsequent pages. The filtering rounds will take place at the T-Hub and will be conducted by our selection panel. Phase – 2 (May 17 –Jul 17): This phase will be instrumental in making the Start-up market ready with the help of mentoring sessions, market research activities, Proof Of Concept & pilot testing . Phase – 3 (Aug 17): The crucial stage of making the Start-ups ready for investor Demo Day. This stage will include scrutinizing of valuations, organizing the Demo Day & strategizing for successful graduation of the start-ups.
- 6. Proposed CoE Advisory Council Strategy to align with other CoE’s at T-Hub Innovation Lab YES Bank Services FinTech SIG Events Setting up an R & D lab for developers & entrepreneurs to work on real life business problems and help in solving them. This lab will have access to Yes Bank API’s and payment gateways to explore & build upon. Yes Bank can collaborate with other COE’s &startupsin the following areas : 1) Providing API & payment gateway usage packages 2) Revenue sharing model for FinTechs requiring a bank as partner 3) Providing the yes bank client base to startups 4) Penetration services for FinTechs working on financial inclusion On the lines Tie- Banglore’s IOT SIG, this group will hold seminars/symposiums (bi-annually) in T-Hub on the relevant topics related to FinTech. This group will include the entire stakeholder spectrum. This group will work as a representative of the FinTech community. 1) Hackathons: Events for other FinTechstartups wherein a business problem shall be put up for the best problem solvers in the business 2) Yes Technology Meetups at T-Hub : Yes Bank will organize startup meet ups to help in peer- to-peer learning for startups and also to learn better ways to manage the accelerator program in the future The objective of the strategies explained above will be – Innovation Lab: To improve upon the existing Yes Bank services and find innovations that can be integrated into Yes Bank’s banking. Yes Bank Services: Expand the spectrum of clients to FinTech startups and become the first choice for startups using Banking products FinTech SIG: Special Interest Group will work towards creating a FinTech Environment in India Events : Creating an environment of peer-to-peer learning & involve developers in FinTech space The COE Advisory Council shall comprise of serial entrepreneurs, successful startup founders in FinTech space, Yes Bank Senior executive, Village Capital strategy head and T- Hub board member. The intention will be to engage the council in mentoring sessions, storytelling, advice on the future of COE and possible investing opportunities The selection panel will be autonomous and will include Village Capital mentors and Yes Bank innovation experts.
- 7. Marketing Strategy to promote the CoE initiative Associative Marketing Campaign Name Description Budget (INR) College Tie-Ups Engineering College & B-School Fest competitions : Sponsoring B-Plan competitions for FinTech ideas with selection in the ecosystem program as a reward 10,20,000 Start-Up Meets Sponsoring start up meets and events organised by such groups and pitching the idea of the program to participating start ups 10,00,000 Corporate Tie-Ups As the investor & startup communities are relatively close-knit therefore the word of mouth medium is highly effective. The word of mouth can be spread by involving key figures in the industry in some capacity such as serial entrepreneurs, mentors, industry experts, guest speakers & invitees on dinner functions. 15,00,000 Program Launch Organised at Yes Bank corporate office with selected invitees from startup ecosystem 15,00,000 In-Program Marketing One event shall be organised for each enrolled startup for their PR activities(For Second Batch) 2,10,000 Symposium/Panel Discussion Banking in the digital era with experts from industry, government & private sector(Succesful Startups) participate. (FinTech Conferences) in association with IAMAI. 12,00,000 Digital Strategies Campaign Name Description Budget Social Media Marketing (1)Sponsored posts on websites such as YourStory, Inc42, Techcrunch, The Entrepreneur digital magazine (2) Inviting applications through websites such as F6S, 91Springboard,seeddb.com which have targeted audiences of startups 40,000 Website Marketing (1) The program will have a separate website clearly describing the benefits to startups through infographics (2) The application process and form filling should be seamless (3) Focus should be there on the details of the program such as duration, investor partners, locations, funding details, mentorship, co-working space 2,00,000 Digital Storytelling After the graduation of first batch, strategies for the next batch will emphasize on the portfolio of companies handled and achievements from the first batch. Digital Storytelling through videos of first batch entrepreneurs and their experiences.(for the second batch) 1,50,000
- 8. Timeline Financial Analysis Pre Induction Phase (Jan, Feb, Mar) figures in INR Employee Salary 39,00,000 Program formulation cost 10,00,000 49,00,000 Phase 2 (May-Jul) T-hub infrastructure 6,00,000 Employee Salary 39,00,000 Market Research 5,00,000 65,00,000 -----------------*--------------------*---------------------*Annexures ahead*--------------------*-------------------*-------------------- Phase 1 (April) T-hub infrastructure 2,00,000 Employee Salary 13,00,000 Set up & Admin Expenses 5,00,000 20,00,000 Phase 3 (Aug) T-hub infrastructure 2,00,000 Employee Salary 13,00,000 Investment 50,00,00,000 50,15,00,000
- 9. ANNEXURE Annexure 1: Article of Intent How to Apply? 1. The founder members of the startup need to register it for either the Summer Program(April-August) or the Winter Program(October-Feburary) 2. The first round of selection entails an elevator pitchdeck and a vision document. 3. The results from the first filter shall be declared after 2 week of evaluation of the documents sent by participants. 4. 20 selected startups shall be called on to the Yes Bank Ecosystem in T-Hub to give an elevator pitch for their business model. 5. A personal interview shall also be conducted of the founders with our esteemed panel. 6. After evaluation of all the teams a final shortlist of 10 startups shall be made available on the website after 1 week. 7. The selected startups will be given 7 days to arrange for travel and other rescources. 8. They will be formally inducted on 1st of April or 1st of October to the Yes Bank Startup Ecosystem Who We Fund? 1. We look for brains, motivation, and a sense of design. Experience is helpful but not critical. 2. Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially. 3. You must have at least 10% equity in the startup to be considered a founder by Y Combinator. Only founders can come to interviews if invited or attend batch events if accepted. Ideally the equity would be divided more or less equally among the founders. 4. We are interested in funding startups operating in FinTech space What do we provide? 1. Accelerator partner shall provide $20k in early stage funding and upto $80k in convertible notes. 2. The equity sought for the funding & incubation will be 7-10%. 3. T-Hub will provide Co-Working space and related infrastructure. 4. Yes Bank shall provide mentorship through industry experts and banking regulatory officers. 5. Yes Bank shall also provide API, Payment gateways and other business enablers. 6. 5 month rigorous program involving mentorship, guest sessions & one to one meetings with serial entrepreneurs. 7. 2 Demo Days – A Yes Bank executive demo day and an external investors Demo Day
- 10. Annexure 2: Types of Fin Tech Startups Facets of money across which FinTech space revolves Lending Peer to Peer – Zopa is the UK's largest peer-to-peer lending service. It matches sensible borrowers looking for low rate loans with smart lenders leaving out the bank and offering better rates all around. Institution to Individuals – Kabbageprovides fast and simple way to fund working capital to small businesses Crowdfunding platform – Circleupis a equity-based crowdfunding platform where accredited investors have free access to direct investments in high-growth consumer product and retail private companies. Management Blockchain – Digital Assets Holding is a company which is working on speeding up the movement of money in many of Wall Street’s markets by using blockchain. Investment Robo advisory – WealthObjectshelps Wealth, Private Banks and Investment firms create or enhance their investment propositions using their customizable modules. Social Trading – Darwinex is one of the significant players in the social trading space. The company allows users to invest in the exact way as the trader would do. Market Data Services –FinTech Sandbox offersfinancial data feeds and APIs for development purposes. They have a robust set of market, banking, investment and corporate fundamentals data. Payment Wallets – Paytm, e-commerce major firm, provides digital wallet to the users which enables hassle free payment Cards – Itzcashprovides multi-purpose prepaid card to empower individuals to handle money in a simple, safe and convenient manner. E-Banking – Finbridgeplatform provides interfaces to the following delivery channels ATM, POS, VISA, Internet Banking, Mobile/SMS banking, Email banking and IVR (Interactive Voice Response) Remittances – WorldRemitcan send money to more than 110 nations and recipients can get their funds through bank deposits, delivery, or cash pickup. The company also facilitates money transfers to refill prepaid mobile phones and the Mobile Money digital wallet. Lending Peer to Peer Bank to Individuals Crowdfunding Platform Management Blockchain Investment Robo Advisory Social Trading Market Data Services Payment Wallets Cards (Debit / Credit / Prepaid) Internet Banking Remittances
- 11. Annexure 3: YES Bank services & their usage Product/Service Name Description How Can it help T-Hub Investment Banking Solutions Advisory Sevices in 10 Knowledge sectors Acquisitions for Big Startups Treasury & Risk Management Solutions comprehensive and competitive line-up of financial market products to help our customers to effectively conduct transactions and manage foreign exchange risks in the global markets. Globaly operating Startups Transactions Trade Finance Services Imports,Exports,InlandTrade,Structured Trade Finance,Supply Chain Solutions,Remittances,Advisory Services Advisory services Collections Management Electronic/Mobile based Collections,Physical Collection Offering,GovtBanking,POS POS based systems for physical startups Payables Management Corporate Net Banking,Expense Management Cards,IMPS,Salary Payments Expense Management Cards Yes Transact On The Go Digital Working Capital Management for your business enables you to view and authorize transaction requests even when you are travelling or out of office, via a secure Mobile and Desktop application. Decisions Taking made faster in Meetings API Banking YES BANK is the first in the Indian Banking Industry to digitize the B2B supply chain with the launch of ‘Application Programming Interface’ (API) banking services. API allows you to access the bank’s transaction processing services from your ERP environment One platform to manage entire financial transactions Structured Finance With a strong regulatory and legal understanding to structure complex transactions, we assist corporates in obtaining superior financial returns in a risk mitigated manner. Since inception, with a strong focus on Corporate Banking capabilities, YES BANK has executed several marquee structured deals with India’s leading Industry giants. Helpful for investors Channel Finance Vendor Finance,Dealer Finance Helping Vendors & Dealers of
- 12. startups Term Lending At YES BANK, we understand the banking requirements of the corporates during their growth journey. To help the corporates grow and expand, we provide funding through term loans for capacity expansion, plant modernization, purchase of commercial assets, etc. Growth stage financing Yes Pay Yes Banks Digital Wallet Easier Transactions for founders Yes Sambhav The YES Sambhav proposition is aimed at providing a comprehensive solution for the financing requirements for SMEs engaged in manufacturing and trading and professionals like Doctors, Chartered Accountants, Engineers and Architects. Network Can benefit Startups Yes Suyog The YES Suyog programme is aimed at providing a comprehensive solution for the financing requirements of SMEs engaged in manufacturing, trading and services. SME can be targeted Yes Tag Social Media Banking Can be employed in socil media marketing for startups API Banking YES BANK is the first in the Indian Banking Industry to digitize the B2B supply chain with the launch of ‘Application Programming Interface’ (API) banking services. API allows you to access the bank’s transaction processing services from your ERP environment. ERP integration for startups UPI YES BANK is at the forefront of adoption of the next- generation payments system Unified Payments Interface (UPI), a simplified and robust payments system being operated by National Payments Corporation of India (NPCI). Digital Payments Expertise & network Yes Money ‘YES Money’ currently has an extensive network of Business Correspondent (BC) partners and Business Correspondent Agents (BCAs). YES Money leverages this network to offer bouquet of products like: Domestic Money transfer, CO- Branded Prepaid Cards, Corporate Cash Management solution, Lending to BC and BC Agents, Online to Offline. Advantageous for startups with sourcing from distant areas
- 13. Lending Products YES BANK has multiple lending products that are aimed at its Business Correspondent partners and agents. The products are designed to help the partners to grow their business and come in multiple forms such as term loan and overdraft. These products are flexible on their rate of interest and tenure. Network/Reach to BC's Corporate Cash Management Solutions Leveraging this network, YES Bank offers cash management solutions to various corporates to simplify and streamline cash collection & management through cash-in-service over a centralized cash management platform. Easy financial transactions for startups through BC network Domestic Money Transfer Leverage network for startup dealing with rural procurement Money Monitor Get a single point access to all your financial information with just a few clicks. Manage bank accounts, track expenses, credits cards, insurance, monthly budgets and more. Financial Planning for start ups with alerts Insta Account Similar registration for startups
- 14. Annexure 4: Startup initiatives by various Banks globally Goldman Sachs 10000 small businesses For all types of startups Program is like mini MBA at no cost Philanthropic, focused on job creation and economic development No equity stake Seed funding, Advice & Industry Connections Barclays Rise Startups in financial services space Startups with well defined team and WIP prototype In partnership with Techstars Co-working space , mentorship and access to Bank APIs 13 week program with upto $120,000 investment from Techstars ICICI Bank Partnered with 22 educational institutions to fund ideas of students Owns IPR of the startup for 3 years Funds range from 5-20 lakhs Virtual Appathon to help create banking applications It provides 50 APIs to create atleast one innovative working prototype Winners are given cash prizes and engagement opportunity with ICICI bank HDFC Bank "Digital Innovation Summit" Integrating winner's solutions into their platform No funding or incubating the startups Partnerships with startups like Tone Tag, Chillr, Movida Axis Bank "Thought Factory" Focus on innovative solutions for Banking Sector Partnership with an 'Accelerator' to collaborate closely with the startups 3 month program to fast track the innovation journey At the end of the 3 months, Investor day will be organized Hack for Hire' to spot talent from across the country throughtHackathons Deutsche Bank Opened 3 innovation lab to evaluate emerging technologies Partnership with Microsoft, HCL and IBM Idea is to fast track the procurement of technology Main Incubator - Commerzbank 100% subsidiary of Commerzbank Startups in FinTech and IT space 200K to 1M euro investment in startups Equity stake in the company Citi "Corporate Accelerator" program for to engage actively with startups 8-10 week accelerator program Virtual hackathon combined with an incubator Access to Bank APIs
- 15. Annexure 5: Startup India progress report The following figure entrails the journey for start-ups seeking tax exemption: Figure: Start-up India selection journey (Yourstory, 2016) Key insights from the guidelines: Product/service being offered by the start-up should either be new or a significant improvement over the existing versions The start-up should either get a letter of recommendation from a recognized incubator, funded by recognized funds or be recognized by the government of India Start-ups which have been registered before April, 2016 will be deemed ineligible for availing tax benefits 728Applications received from Start-ups (till 15 July, 2015) 16Start-ups qualified for tax exemption under the Finance Act 1360Croreshas been disbursed in loans 179 Croresdisbursed to Dalit entrepreneurs
- 16. Annexure 6: Recent accelerators in line with the Startup India Campaign Here is a list of a few recent start-up funds in line with Government of India’s ‘Start-up India’ initiative: 1. ONGC Start-up: A 100 crore fund to increase the contribution of fresh implementable ideas in the oil & gas sector. (Yourstory, 2016) 2. Karnataka Government Start-up Cell: Funds of up to INR 50 Lakh/each for a valuable workable idea. (Yourstory, 2016) 3. Oracle India, Bengaluru: 125 hours of combined of combined mentorship from Oracle & industry experts, 24*7 access to a co-working space within the campus & other benefits in form of software licenses, customer trials, etc. 4. Start-up Village, Kochi: established in 2012, it has supported nearly 590 physical incubates in Kochi and 200 in Vizag.Recently, it was ranked top among the best 100 start-up incubators in India. T-Hub had recently partnered with the start-up village for the latter’s digital initiative SV.CO. 5. Neoleap Business Ventures, Kolkata: Eastern India’s first structured start-up accelerator, set up by two entrepreneurs and an IIM professor. They provide access to Angel investors & angel networks. They also conduct workshops on various functions. Their revenue model: Joining fee from the start-ups Commission on the funds raised by them Sweat-equity in the start-up’s venture (Hindu Business Line, 2016)
- 17. Annexure 7: Opportunity benefit analysis
- 18. Appendix 8: MOU details for COE & other Stakeholders Agreement B/W Yes Bank & Village Capital (accelerator partner) Village Capital shall provide seed funding to the start-ups getting enrolled The entire execution shall be performed by Village Capital Yes Bank FinTech Ventures will be liable to market the program Yes Bank FinTech Ventures will ensure the availability of Yes Bank’s services & resources to the enrolled Start-Ups Yes Bank FinTech Ventures will be a given an exclusive Demo Day to invest in graduating start-ups Yes Bank will be in an advisory position and will refrain from directing the program direction Village Capital will work towards increasing Yes Bank’s position in the FinTech space Agreement B/W T-Hub & Yes Bank T-Hub will provide subsidized packages in its catalyst Co-Working infrastructure for the new accelerator program Yes Bank will try to promote T-Hub in the marketing activities of the program T-Hub will use its mentor network for the benefit of the program Yes Bank will help other COE’s in T-Hub by providing them with services & mentoring Appendix 9: Need Identification For Start-Ups According to primary research conducted among our network of entrepreneurs we came up with following issues that affect a start-up: Guidance in areas of regulations, law & business management Lack of market research can lead to failures & Start-ups do not have the resources to carry out such a research Many incubators/accelarators do not value their companies on the basis of potential customer base but just on existing scale and traffic Valuation advisory is a vital component for Start-Ups Yes Bank API and payment gateways can be a strong reason to join an accelerator program The wave of start-ups has led to formation of a negative image of Start-Ups and thus even dedicated founders are finding it hard to get an investment Information about Start-Up incubators /accelarator programs is not provided at universities and institutes.
- 19. Annexure 10: Financial Analysis of marketing campaigns