ET’s Sai Ishwarbharath and Suraksha P, Gopalakrishnan said retail investors must start viewing startups as another asset class. He also welcomed the government’s decision to take a relook at the Personal Data Protection Bill and spoke on a range of issues, including his pet projects in the areas of brain and genetic research.
Edited excerpts:
You have always favoured startups going in for Initial Public Offerings (IPOs), but there are too few winners for retail investors right now…
The right initiative is to educate the investor. We would want people who understand and can take that risk because startups are the riskiest asset class. The company should think about an IPO only in cases where the risks are mitigated to a great extent. Only if you have complete business visibility for three years – from a revenue and profitability perspective – should you venture into the IPO stage to invite retail investors. The best companies are public companies (that allow) everybody to participate in the wealth generation journey.
What is your take on the startup funding winter? Is it an aberration or does it have a deeper impact?
These are cycles in the economy. We are going through a challenging period because of Covid-19, the Ukraine-Russia war and inflation. I’m not worried about it. I still see startups getting funded at angel, pre-seed and seed stage of investing. It is really the Series B, C and D, where the funds are also available, but there is a lot more due diligence and more discussion around valuations. The funding squeeze forces them to focus on a few things and may have to lay off people. Employees need to understand the inherent risk of working for startups. We always say eight out of 10 startups may fail. Hopefully, micro, small and medium enterprises (MSMEs), the IT sector and mature companies will have recruitment (that can compensate for these job losses).
What is your take on the withdrawal of the Personal Data Protection Bill?
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It is good that we are taking a relook because some of the drafting happened a couple of years back and now things have changed. I’m supportive of reintroduction in a revised format…In my opinion, there is no ambiguity on the definition and what constitutes non-personal data. Data that has no personal and entity identifiers is non-personal data. Anonymized personal data or data about physical phenomena like weather, traffic, etc is non-personal data. In other words, if it has a person’s identity information, it is personal data.
Should we have a statute to trigger innovation and R&D spending among corporations?
Corporate Social Responsibility (CSR) spending towards R&D has been allowed after the government amended the CSR rules recently. They have not specified what percentage you can spend for research. We need to increase spending on R&D. As a country, we are spending about 0.7% of the Gross Domestic Product (GDP). We need to take it to 3% of the GDP with 50% contribution from the industry. India has to truly become a knowledge economy driven by Intellectual Property (IP) and products we create, leveraging the technologies and research in our academic institutions. We need patient capital for research and the ability to accept some failures.
Has the low funding resulted in brain drain?
I don’t agree with this premise as this is not a new phenomenon. If you look at the last 200 years, there have been waves of people leaving the country for various reasons. We should be producing more educated and trained professionals, and leaders. We have benefited from the Indian diaspora holding senior level positions in organizations. Many of those organizations and startups have set up their development centres here. In the last 5-6 years, we have created more than 100 unicorns and attracted over $50 billion through the startup ecosystem.
How are you brain and genetic research projects shaping up?
The Centre for Brain Research (CBR) at IISc, Bengaluru, has two major, long-term programmes. One is a 10-year longitudinal study of 10,000 people to see how they age and develop aging-related disorders. This is to understand the onset of dementia, Alzheimer’s, and Parkinson’s, and whether they can be detected earlier. These disorders start almost 20 years before the symptoms become visible. I’m glad to see the progress despite Covid-19 because this study is happening at Kolar district in Karnataka. Next is the genome India project where multiple labs across the country have come together to collect DNA and full genome sequences of 10,000 Indians. CBR is one of the anchor sites for doing this. This data will help us understand the diversity of our population and uniqueness about the genetic makeup of India for better understanding of diseases and their remedy.
You set up three chairs at the IISc, hoping to bring in researchers in the areas of computational neuroscience, machine learning, data science, and neuromorphic engineering for collaborative research. How far has that progressed?
It has done reasonably well. We have collaborative research happening between IISc, the University of Maryland, the Pennsylvania State University, and Columbia University (from where these visiting chairs have come). Covid-19 put us back because travel was not possible, but we leveraged online collaborative tools, so the research continues. There are at least 40 PhD, postdoctoral students and young faculty working in the area of brain sciences at IISc. We have a similar programme in IIT-Madras with visiting chairs. The CBR there is a result of international collaboration.
