As A Defence Startup, We See Ourselves As Problem Solvers: MWIVEN MD Jayaraghavendhar
On a Defence Start-Up, BW Defence speaks with with Jayaraghavendhar, the Managing Director of MWIVEN. How a start-up company or a company with skills in defence, which is so vital for the ecosystem, can contribute in the nation building in the defence production and in the economy overall? Excerpts of the conversation:
In our BW defence, we have been focusing on some of the key defence OEMs across the world, collaborating with Indian defence. Focus has been on the innovation and technology. Today, we are focusing on a vital part of our defence ecosystem, what we call it start-up in defence.
How a start-up company or a company with skills in defence, which is so vital for the ecosystem can contribute in the nation building in the defence production and in the economy overall? Today to talk over many such issues on the possibility and challenges, we have Jayaraghavendhar. He is from MWIVEN, which is pronounced as Modern Warfare Integrated Venture.
Let me give a bit of introduction about MWIVEN. MWIVEN is also recognized in Indian Ministry of Defence to design Develop and manufacture tactical missile system and GIS minefield recording system MWIVEN is also recognized by the Department of promotion of industry and internal trade under the Ministry of Commerce and Industry. An MWIVEN is more particularly as far as defence is concerned is a licensed manufacturer of anti tank, missile system, remote control weapon stations and anti tank guns in India, which is also be the collaboration from the Belarusian OEM.
You are a very vital linker when everybody's talking about how a start-up can scale up what can start do especially in defence, which India is at threshold of building a big defence ecosystem. And I call it a different ecosystem is as important part of our economy growth of India. So I start with you by asking tabout your journey at the start-up. How did you start and what exactly you offer in the defence?
Thank you very much for your great introduction. We start-ups definitely need support from you and people like you to scale up. So to answer your question, as a start-up, we just started, like any other start-up who had no idea about defence and where to start, We started with the help of a government organization for TANSIDCO initially to help us up getting into this ecosystem and we gradually became a Indian Army’s authorized Design and Development Agency.
In respect to you, I've been a start-up for a long time, with lot of failures and mistakes on the way.
So this is one of the start-up that I have ventured into. For me this more than a start-up venture, this is about protecting the people who protect us, it is just not about building a weapon system or becoming a billion dollar company it is more about the accountability.
From the day, I started this company in May 2019. Till now we have come a long way, in terms of scaling up with very limited resources with very limited team.
The entire credit goes to government of India and government of Tamil Nadu because they've been very instrumental in helping us out in reaching the stage. So I would like to take this opportunity to thank them for being kind and accommodating us all the way till here.
Right now we have two projects in hand, which is designing and developing the third generation anti tank missile systems for Indian Army and the minefield recording system for the Indian Army. So this is where we reached and we have got a couple of projects, which we are working out and submitting an RFI for. So hope we get that in next year.
So to begin with, you said you were lucky to be at right place at the right time. But how did you get such contract? As a start-ups, how easier was it for you to get into these technical contracts?
What I mean by being lucky to be in the right place at the right time is that, there is a military doctrine shift in the way recent combat and future combats to come and there is a change in government of India’s approach towards Private defense players and also there is No big monopoly defense brands in India like other international defense brands, there is a lot of opportunity for small companies like us to get a share of market which is next to impossible in other developed military Industrial complexes.
The process is very simple apply for expression of interest posted by the respective forces and if you qualify, you are in the game.
We are one the fastest growing technology economy’s in the world, the most difficult part is the time it takes to prove yourself in this sector to get these technical contracts is the challenge, anyone who wish to enter should be ready to have the patience and keep their burn rate as minimal as possible.
The general approach has to be that you should be prepared to fail in your economics so you learn from its mistakes and improvise it, worst which would happen to you is that your start-up failed in the process of self reliance and which will be seen as one causality or the best a martyr but if your product fails you are definitely a traitor because somebody putting their life on the line trusting that your product will deliver what it was promised and if the product fails then somebody is bleeding because you didn’t sweat enough.
So you are a start-up and you had no experience in defence, but you have a technology experience in background, and you have some ideas, which you think you can contribute, in terms of providing a weapon system to our armed forces. How did you come up with this because there is a big amount of R&D and there is always a capital resources involved? So how would you build a case for your start-up for the armed forces or your end user?
See , we need to fundamentally understand that our forces are not asking us to fight along with them but asking us only to build some tools, components and systems to protect us only and If we don't do those small things, I don’t think we should get into this defense industry and claim to be a citizen of this country.
When it comes to technology in terms of defence ecosystem, it is already existing and the required literature to learn is available everywhere.
So when an existing requirement is there, it is just a question of bringing all technology and service requirement together. We have to keep in mind that we are in the business of protecting the future and nobody will give us a latest technology to our country, even assuming that we are willing to pay an exorbitant price for it, So that is where we see our opportunity. Because we see ourselves as problem solvers, and not as someone who just adds a value to existing problem or a solution, which is already there.
I would like you to talk about all the concrete projects and systems. What are you planning for the Indian Army and what is the timeframe of delivery?
Yes, definitely we are currently designing and developing a third generation anti tank missile systems for the Indian Army, we are expected to deliver our first prototype by end of next year. today we see ourselves as a design and a development agency who is designing and developing from scratch in India to be catered to the Indian Army as well as to as a defence export in the future.
I am not a not a liberty do discuss more details as it involves national Security, So I would like to leave that part out.
In general we are a modern Warfare company our core offering will be aligned towards asymmetrical warfare capable enough take on the enemy in a urban combat environment.
We have just started working on the core components and we should be in a position to deliver the end users before end of this year.
Where do you design and develop? Does government agency for example DRDO facilitate and guide you when you have certain projects in your hand, and you want to develop it further-- you want to test further on that? Could you talk about such challenges?
We are in the initial phase, where we design and develop in house at our office here and London.
We are a manufacturing defense equipment’s testing is only allowed in the testing centres authorised by DGQA and we will be testing it there.
We have not approached DRDO yet, and we are figuring out on how to work with them.
The major challenge is designing and developing a product which will be relevant for another 15 years to come and does not affect the operational capability of the end user.
We have developed a robust process and stringent procedures in terms of testing our products based on the international guidelines which is critical to our promise as brand.
How can a start-up can scale up, reach out to global markets, assimilate technology and collaborate with international partners? How do you see your company going that direction and scaling up?
When it comes to scaling up, it is always a chicken and egg story. We have to figure out a way to overcome this challenge. I will definitely not complain about it because, I have slept peacefully for so many years knowing our forces are having sleepless night protecting me and my family and this is our time to give it back to them in a small way by having couple of years of sleepless nights.
For a start-up, funding is always a problem. So it alone cannot deter a start-up from doing anything, will figure a way out it in the right way.
Currently, with respect to exports, we are looking at the idea scheme by government of India, where government of India extends its line of credit to other friendly foreign nations, where we can export our products until we get a concrete order for the Indian Army.
The only problem right now when it comes to defence exports is that the confidence level of foreign partners who wish to buy indian products is low because we don’t have indigenous battle proven products unlike our previous suppliers like Russia, America and others, who have an existing platform and products that are tested on the battlefield over a period of time.
So building the confidence over a period of time is a key to success in this endeavour, in respect to hand holding the government is doing their level best and we should really appreciate them for being so proactive, having said that there is a lot of gaps in terms of policy to execution.
Let us say for an instance there should be an online portal for friendly nations to apply and a single window mechanism to procure from the Indian entity combining foreign consulates, Ministry of external affairs, bank and other related stakeholders to communicate and obtain faster results.
This is the burning question. How can MSME be a greater part of our defence ecosystem, how can they scale up? How can they be innovative and be part of the solution? What do you expect from government to support you?
MSMEs are not start-ups because an MSME has a existing business and will see these products as an add-on opportunity to their existing business but a start-up is a problem solver who is betting his entire livelihood on this problem that the armed forces wanted to be solved and his commitment level will be very high towards solving it because the logic is very simple, he doesn’t have a second job or other businesses to support his family. Until proven and procured the world will see him as loser with unrealistic expectations which has a profound effect on his family, friends and well-wishers who hoped one day success.
In general, most of the start-ups come from a working class background where their families are either working, self employed max in trading business. To digest the fact that someone is getting into Defense will give an impression of a mad guy.
Let me give you an example, somebody asks your family about you what do you do for your living, they would say “ he is basically a journalist and currently working as an editor in business world” and imagine a start-up like me and someone asks about me to my family, what should they say “ He is designing a state of art Missile System in his home office” and world around him will call him irresponsible because, he is not earning to support his family and being selfish running behind a wild fantasy of protecting the protectors.
Today, we start-ups are always seen as a Insignificant entity with huge aspirations who is on a MAD trip without M-money, A- Authority over defense subject and D – Direction, but our only strength is that our determination to Make a difference when the whole world around us is against our madness.
All we start-ups have is the will to fight and nothing less to offer and hope everyday that day of acceptance and financial independence will soon come so that my friends and family can walk with their shoulders held high because their assessment about us was right or else there is another day of failure and hoping for success cycle continues.
MSME’s on the other hand is very vital to this self reliance but will need a start-up or a OEM to absorb them into the supply chain and because of necessity and not by choice, because no one company can produce all the components by themselves, due to lot of constraints.
Most important gap where, I feel government should step in creating a bridge capital system like TREDS because this will not allow merger and acquisition of the small companies by foreign giants which happens a lot even in established Military Industrial complexes such as USA, where good technology developed will be purchased by a bigger player on a later date and whole purpose of Aatma Nirbhar will get defeated.
The major challenge is the working capital for any start-up, because this is not a B2B or B2C business but a B2G business where you do not have a market outside this sphere to convince anyone to invest in us without any collateral nor a proof of concept to prove their offerings will work. .
The initial Project Sanction orders are issued based on no commitment, no cost basis where the question is not about borrowing but how to repay it back with interest when we fail is a big question mark which I don’t think anyone is having answers for this question.
I personally feel that defense companies who are issued project sanction orders should be allowed for a TREDS (Trade Receivables and a Discounting system) linking a Credit guarantee scheme like CTG-MSE to get working capital as an overdraft online with a dedicated branch dealing with ministry of defence.
Let me explain why I think, this is important?
We have to understand the fundamental of a bank, where the repayment capacity is the only primary criteria where the banking system allows them to lend money and why will any banker will have a Non performing Asset where everyone knows that probability of a start-up failure is more than 50% and who do not have a definitive repayment deadline nor a credit history to support the case.
Secondly, most of the bankers feel that National security or being self reliant in defending the nation is Indian Ministry of Defence problem and not theirs.
Thirdly, Defense Industry is a capital intensive business where there are so many regulatory compliances to be fulfilled before commencement of business and the funds required post winning the tender becomes humungous, the only option left is going to an equity investor and most often have someone on board who will not allow us to execute what is right for the end user but what is right for their investment.
Start-ups will end up as an entity who started with a definitive purpose of protecting the protectors but landed up being something else where protecting the investment and shareholders interests only.
so having access to TREDS allows companies to get the funds on time at a reasonable rates without disturbing the execution of the project