Sometime ago, when accelerators were popping up in India like mushrooms after rain, we’d asked if it was going to repeat the e-commerce frenzy we saw 3-4 years ago. It seems our fears weren’t completely unfounded.
According to multiple sources we spoke to, Delhi based startup accelerator and incubator The Hatch has ceased operations.
Early team members have left the accelerator founded by Puneet Vatsayan and Anupama Arya in Oct 2011. This was first reported by Techcircle.in. The official website of the company, thehatch.in is down. One of the accelerator’s portfolio companies confirmed the development to NextBigWhat.
An industry watcher who did not wish to be named said that the sustainability of such a model is in question. “Incubators which work with very early stage startups founded by freshmen may not be able to build a sustainable model around it,” he said.
The pre seed stage fund invests $30,000 in each startup with maximum 6 investments a year. The business incubator is an adviser to many startups including AgentsBids, Spurfy, Mera Gaon Power, Scooze and Poster Gully.
Mumbai based Hatch Services Fund shuts
Meanwhile, another incubator fund based in Mumbai has shut down, according to a new report [source]. Hatch Services Fund (not related to The Hatch) announced its closure on its Facebook page citing regulatory changes to Angel funding in India.
We don’t mean to imply that there is a trend going on here. However, it is important to assess how accelerators intend to be valuable to its stakeholders. After all, it’s not just about real estate!
According to our research report on Accelerators in India: there are close to 50 startup accelerators in India, most of them offer a mix of services – some just focus on mentorship and some on real estate. The report, based on a survey of more than 12,500 entrepreneurs found that mentorship is a key requirement for startups. Nearly 31% of Indian entrepreneurs are ready to give 2-5% equity for mentorship, while 17% are ready to part with 5-10% and the rest with 0.1-2% equity (Buy the report here).
Recommended Resource: Incubators and Accelerators in India: THE List