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Future Asia Ventures The Unsustainable Boom: Accelerators & Startups June 2016

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Report provides updates on corporate accelerators, fintech trends and advice for startups and entrepreneurs. Inlcudes six guest authors. Focus on Asia fintech and Singapore ecosystem

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Future Asia Ventures The Unsustainable Boom: Accelerators & Startups June 2016

  1. 1. Page 1Copyright 2016 Future Asia Ventures The Unsustainable Boom: Accelerators & Startups June 2016
  2. 2. Page 2Copyright 2016 Future Asia Ventures Disclaimer Future Asia Ventures has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Some of the information used in preparing these materials was obtained from third party and or public sources. Future Asia Ventures and Falguni Desai assume no responsibility for independent verification of such information and Future Asia Ventures has relied on such information being complete and accurate in all material respects. We disclaim any responsibility to update the information or conclusions in this report. Future Asia Ventures and Falguni Desai accept no liability to you or any third party for any loss arising from any action taken or refrained from, or any reliance placed on, or use of, the information herein by you or any third party, howsoever arising, as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damages even if advised of the possibility of such damages. Opinions expressed herein are current opinions as of the date appearing in this material only and are subject to change without notice. This information is provided with the understanding that with respect to the material provided herein, you will make your own independent decision with respect to any course of action based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. Neither the information, nor any opinion contained herein, constitute a solicitation or offer by Future Asia Ventures or Falguni Desai to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. Future Asia Ventures and Falguni Desai does not purport to, and does not, in any fashion, provide broker/dealer, investment advisory or any financial advisory services. This information has been prepared solely for informational purposes. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisers. No part of this document may be reproduced in any manner, in whole or in part, without the prior written permission of Falguni Desai or Future Asia Ventures. By accepting this material, you acknowledge, understand and accept the foregoing.
  3. 3. Page 3Copyright 2016 Future Asia Ventures Media & Distribution Partners www.ourcrowd.com Funding the next generation of startups Connecting Asia’s startup ecosystem www.techinasia.com Insights into Payments www.thepaypers.com Covering the emerging global industry of disruptive finance www.crowdfundinsider.com
  4. 4. Page 4Copyright 2016 Future Asia Ventures Table of Contents • Executive Summary • Global Accelerator Overview • Fintech: The Boom Inside of a Boom • Advice for Early Stage Startups
  5. 5. Page 5Copyright 2016 Future Asia Ventures Executive Summary This report, similar to the prior three reports, contains a global overview of the corporate accelerator landscape. In addition, it also features observations on the growth of the fintech startup sector and advice from startup advisors from around the world. Key findings and themes are summarized below: There are now 131 corporate accelerators worldwide. While 13 new launches have happened this year, this represents a significant slowdown from the prior year which had 46 launches. From a country perspective, Singapore has boosted its profile with several government initiatives which support various startup sectors. The island nation stands out in its monetary commitment to entrepreneurs and its strong stance towards innovation. With an estimated 6,000 fintech startups around the world, the fintech sector is a boom inside of the startup boom. This is unsustainable and we expect to see a weeding out in the next 1-2 years. Asia is the dominant region for fintech as 3,000 companies are tackling payments, mobile wallets, currency exchange, remittances, credit scoring and other financial processes. The diverse mix of affluent and rural populations in the region creates a need for all types of fintech services and the region is likely to be a leader in the B2C fintech innovation. Finally, our guest writers provide their unique viewpoints and advice on sales, operations, pitching, choosing an accelerator program and more. The writers hail from Australia, Denmark, Hong Kong, India, Singapore and the United States.
  6. 6. Page 6Copyright 2016 Future Asia Ventures Global Accelerator Overview
  7. 7. Page 7Copyright 2016 Future Asia Ventures 1 2 14 13 15 27 46 13 2009 2010 2011 2012 2013 2014 2015 2016 Number of Corporate Accelerators Launched Each Year Source: Company Websites and Florian Heinemann Accelerator website www.corporate-accelerators.net Note: This count only includes programs which have designated and formally titled as “accelerators”. Labs. Incubators and other open innovation formats are not included in this count. Corporate Accelerator Launches Decrease Significantly Corporate accelerator launches have slowed down since last year. At the mid-year point in 2016, there have only been 13 launches worldwide. The slowdown is due to new open innovation formats and organic innovation taking place at companies.
  8. 8. Page 8Copyright 2016 Future Asia Ventures 2016 Proving To Be Slower Year in Americas and EMEA 1 8 2 7 8 12 3 1 1 5 9 7 13 20 2 1 2 1 6 14 8 2009 2010 2011 2012 2013 2014 2015 2016 Americas EMEA APAC Number of Corporate Accelerators Launched Each Year by Region
  9. 9. Page 9Copyright 2016 Future Asia Ventures Corporate Accelerator Facts and Figures 31 22 12 Top 3 countries by corporate accelerator count USA UK Germany More than half of all corporate accelerators are focused on 3 sectors 26 Technology + 23 Financials + 20 Telecoms 69 At least corporate accelerators have been shutdown in recent years India has 9 of the 32 accelerators in Asia 7
  10. 10. Page 10Copyright 2016 Future Asia Ventures
  11. 11. Page 11Copyright 2016 Future Asia Ventures 41 58 32 Corporate Accelerators by Region 131 Corporate Accelerators Exist Worldwide The global corporate accelerator count stands at 131. While accelerator launches have significantly slowed down this year for the Americas and EMEA regions, Asia Pacific has kept pace launching 8 new corporate accelerators. While the region has an initially slower start, the Asia Pacific regional count of 32 accelerators is beginning to close the gap with other regions. Around the World
  12. 12. Page 12Copyright 2016 Future Asia Ventures Singapore’s Innovation Ambition "The Research, Innovation and Enterprise Council’s 2020 Plan will allocate $19 billion over the next five years towards developing Singapore as a knowledge-based, innovation-driven and future-ready economy. To turn this vision into a reality, people need to find inspiration and then act. Participants in the ecosystem need to discover new talent, learn from other innovation champions and create alliances that shape the future of their business." - Michelle Yong, Founder, Collision 8 Singapore Fast Facts Population 5.69 million GDP $307 Billion Startups ~5300 Map of Southeast Asia Government Funding for Innovation & Startups National Research Foundation ESVF Program -SGD $100 million fund for Series A and above National Research Foundation Technology Incubation Scheme for early stage startups Matches 85% of VC investments up to SGD $500k SPRING Cofunding program matches up to $1 million in VC funding SPRING Sector Specific Accelerator SGD $60 million fund focused on cleantech and medtech Singapore Tourism Board Business Improvement Fund focused on technology Covers 70% of eligible costs Technology Entrepreneurs Commercialization R&D project funding up to SGD $750k ACE Action Community for Entrepreneurs SGD $50k matching grants for startups Media Development Authority iJAM grants for media startups in 2 parts up to SGD $250k Monetary Authority of Singapore FSTI Financial ServicesTechnology & Innovation program SGD $225 million fund Incentives for banks to open innovation hubs in Singapore
  13. 13. Page 13Copyright 2016 Future Asia Ventures Fintech: The Boom Inside of a Boom
  14. 14. Page 14Copyright 2016 Future Asia Ventures 6,000 The Unsustainable Ascent of Fintech Startups The fintech ecosystem is unquestionably active, eclipsing other startup sectors as it continues to grow. There are an estimated 6,000 fintech startups around the world. As with any sector, we expect there to be winners and losers. The coming years will naturally see a fall off as companies face regulatory hurdles, merge with other players or simply run out of capital without gaining traction. 1. Is your company building commercial partnerships with a large financial institution? 2. Have you raised enough capital to last a 24 month period? 3. Are you cooperating with regulators and securing licenses to conduct business? 4. What is the key factor about your service that will drive sales and do you have the necessary sales talent? 5. What is the biggest risk or threat to your business and what is your plan to deal with it? Key Questions for Founders
  15. 15. Page 15Copyright 2016 Future Asia Ventures
  16. 16. Page 16Copyright 2016 Future Asia Ventures What Makes Fintech Different in Asia? While most startup sectors have historically been dominated by Silicon Valley, the fintech boom of the last five years has had a very different geographic footprint and a very broad set of stakeholders. Asia’s market dynamics and diverse population create a different set of opportunities and challenges, from those in the U.S. or Europe. Here are four factors that make Asia’s fintech landscape different: Geographic Fragmentation.  Asia has more than 20  countries, each with their own economies, currencies and  regulatory bodies. Aside from Indonesia, China and India,  founders from the other nations live in small markets, so they  must look outside their borders.  While this poses hurdles it  is also an effective weeding out process. Entrepreneurs who  make it past their own country understand the importance of  product design that can function in diverse markets. Unbanked Populations. According to The World Bank, 2  billion people are un-banked.  Slightly over 50% of them are  in Asia, particularly India. The un-banked live in rural, they  lack of trust in banks and generally don’t have enough  money.  In India, UIDAI is in the process of registering all  Indians with a unique 12 digit number which can be used as  proof of identity. The program is the largest biometric  database in the world and may prove to be a game changing  project for fintech and financial inclusion Mobile Potential. Asia leapfrogged the landline era and  went straight to wireless and mobile.  The result has been  mobile phone penetration rates of 80% to as high as 99%.  Mobile apps have become a focal point for fintech in Asia.  But a key gap is credit data. Credit bureaus are still a  relatively new addition in Asia.  In Hong Kong, the consumer  credit reference agency has only been operating since 1982.  Singapore’s was formed only in 2002.  Fintech entrepreneurs  see an opportunity to supplement limited credit history with  mobile data and social media to create new credit metrics. Growing Consumer Class.  As Asian economies emerge and  develop, a growing middle class population is consuming  more. While the U.S. has had Amazon and others since the  mid nineties, e-commerce in Asia is still a very young sector.   That coupled with low credit card penetration ranging  anywhere from 2% to over 50%, e-commerce retailers  themselves are innovating payment tools which allow  consumers to pay directly from their bank accounts or mobile  accounts.
  17. 17. Page 17Copyright 2016 Future Asia Ventures The Asia Pacific region is seeing strong activity in the fintech arena, with more than 3,000 fintech startups across major and emerging economies. High populations of un-banked and under-banked and a strong mobile penetration, are giving rise to payment, mobile wallet and simple tech-enabled services for handling basic transactions. Asia Pacific’s Fintech Boom Source: Estimates based on Angellist and Tech in Asia Country # of Fintech Startups China 2500 India 400 Australia 150-200 Hong Kong 150 Singapore 150 Vietnam <50 Thailand <50 Malaysia <50 Philippines <50 Indonesia <50 Asia holds great potential for fintech innovation. While the Western world might lead the world in B2B innovations that change institutional processes, Asia will likely lead in B2C fintech applications.
  18. 18. Page 18Copyright 2016 Future Asia Ventures Advice for Early Stage Startups
  19. 19. Page 19Copyright 2016 Future Asia Ventures Reaching Terminal Velocity: How To Make the Most of An Accelerator Program The value doesn't end when the accelerator does If you are diligent with the mentors and program leaders these  relationships will last and pay dividends over time. As these accelerator  programs evolve and mature their network will grow and you will have  access to new partners, talent, and mentors. Reciprocate and improve  the value of your accelerator network by connecting program leaders to  the next group of rising startups and corporate partners looking to get  involved with an accelerator. You will foster strong business  relationships and built a network that will last beyond your first venture.  Provide value to that network and it will give back ten-fold.  Be 100% transparent Accelerators are invested in you and wish you nothing but success. You  must be transparent with your program leaders or you risk damaging  the reputation of the accelerator. Nothing is worse for a partner coming  into an accelerator than to be promised one thing by the program  leaders and pitched something completely different by a startup team.  This damages the reputation of the accelerator and puts future  relationships in jeopardy. Being part of an accelerator network should  give you instant legitimacy but this legitimacy requires you to be honest  to your program leadership. Be open and protect the reputation of your  program. Network is everything and the right accelerator can provide you the  access and the tools to be successful. Choose wisely, avoid  complacency, and you may propel your startup to terminal velocity. By Casey Lawlor Co-Founder & Director of Marketing Fluent USA Choose the right accelerator for the stage of your startup Accelerator programs vary in both the stage of the company they  support and the goals they aim to achieve. Having navigated three  accelerators and mentored at a fourth, we have seen the diversity of  resources and metrics of success present in different stage  accelerators. Early stage programs provide mentors, technologists,  and business strategy or lean canvas experts to help develop your  MVP or prepare you for a series seed raise. Other later stage  accelerators are often built to aid in business development or  navigate regulatory environments for specific spaces that are hard to  penetrate such as medical device or fintech industries. Some include  a mix of all of the above. Be upfront about what you want to achieve  during your time at the accelerator and ask how they measure  success. Check your alignment. You get out what you put in We hear from startups all the time that they feel they are not getting  enough face time, connections, or investment dollars from their  respective accelerators. Meanwhile, they have yet to identify and  reach out to any of the mentors in the network, attend program  events, or even engage the program management with their  concerns.  Be explicit, be diligent, and put forth the effort to maximize your time  at an accelerator as it goes by quickly.  “Look for mentors who have been in your shoes, know the market, and seem genuinely interested in helping without asking for anything in return. And if you take only one thing from this article - always follow up with mentors. And then follow up again.”
  20. 20. Page 20Copyright 2016 Future Asia Ventures Outsource: It's Not a Dirty Word You have an idea for the next billion dollar mobile app. Your mind  is dreaming about that amazing new website you’ve planned.  You fantasize about becoming your own boss, building a global  company, or becoming a leader in your industry. But you don’t  know how to code. Ah, well … it was a cool idea. And that’s that.  Don’t let that happen. “The only thing worse than not doing what you want in life is knowing what you want but not knowing how to get it.” This is especially true in an industry where so much is dependent  on highly refined skills, knowledge, and experience. Combine that  with the costs associated with either obtaining those skills yourself,  or hiring someone else to do that, and it’s no wonder that many  potential entrepreneurs stop themselves from turning their  dreams into reality. To those entrepreneurs, I have one bit of advice: outsource. Outsource is a dirty word nowadays. That’s understandable;  everyone knows someone who knows someone that worked with  someone that got scammed, worked with atrocious developers, or  had their money simply stolen. Outsourcing is also a red flag in  others ways. As an investor, the moment I see a pitch deck and  that the entire technical team is outsourced, I pass, on the  spot. And indeed, outsourcing can have its problems. But there is something far, far worse than outsourcing, and that’s  intimidation. Being intimidated by new things, or the risks  associated with working with strangers, or delving into something  you know nothing about. Because intimidation begets paralysis,  and paralysis begets inaction in pursuing what you want to do.  Outsourcing can be tricky, but like all things, outsourcing is a skill that  can be learned. Learning how to manage projects, deal with engineers’  expectations and, above all, refine the idea in your head into an actual  product. When you outsource, you are forced to understand the process  of how things are created, and that is an incredibly important quality for  any entrepreneur to have. What to do you, then? My advice to potential entrepreneurs: think of an  idea, and outsource for it. Something simple, silly, a service that you  would get value out of, but not something you expect thousands — or  really, even dozens — of people to use.  What’s important here is that it has real-world value and use, and it’s  simple to develop. A mobile notification whenever your favorite show  comes on; an application that allows you to use your desktop keyboard  to type messages on your phone; you could even try appropriating  mainstream applications into something personalized for you. Think of an idea, go on popular outsourcing websites, and find someone  to do it for you; UpWork is one well-trafficked example. Devote a few  hundred dollars to this; if it’s simple enough, you can still get  something fairly useful. And once you have that, not only will you have a  finer appreciation for the process of creating and launching your own  product, but you will also overcome the paralysis that handicaps so  many other potential entrepreneurs trying to overcome the technical  hurdles associated with their ideas. So, what are you waiting for? Go build some stuff. By Justin Hall Principal Golden Gate Ventures Singapore
  21. 21. Page 21Copyright 2016 Future Asia Ventures
  22. 22. Page 22Copyright 2016 Future Asia Ventures Creating a Winning Startup Pitch To make a winning impression for your pitch, your presentation should be quick, succinct and memorable with particular focus on storytelling techniques and some credible support for your idea. Successful tech entrepreneurs also have some good advice for startup pitchers. In speaking with Travis Kalanick of Uber fame, he suggests practicing in front of your friends/peers and make them believe...whatever it takes. “Pretend you're telling your friend about your company, and that you want to prove without a shadow of a doubt that your thing is the best thing that’s going to happen.” -Travis Kalanick CEO and Founder Uber Sounds pretty basic right? Yet when you take a moment to consider this, it’s not an easy ask - convincing anyone ‘beyond a shadow of a doubt’ of some new idea is a formidable task. One that if you do accomplish will certainly give you a definitive advantage at a pitch event Alejandro Cremades is the Co-Founder of Onevest, an investment crowdfunding site for startups. He highlights the power of storytelling, the ability to bring the audience into the story and introducing a sense of timing into your presentation as key assets to a strong pitch. ”When you are pitching to investors they want to know that you are at the right time in history to be executing your plans with your venture.” - Alejandro Cremades Co-founder Onevest Ultimately, you need to just get out there to practice and pitch to different types of people. The collective feedback may give you a perspective that gives you that winning advantage! By Stephanie Kong Principal Marketing Head, APAC EdgeVerve Systems Ltd. Hong Kong
  23. 23. Page 23Copyright 2016 Future Asia Ventures Deal or No Deal? How to Work With Large Corporations By Trey Zagante Founder & Managing Director Venturetec Group Australia Landing a deal with a big name logo can be a pivotal moment for a startup and the great news for startups is that right now, many corporations are increasingly looking to the startup ecosystem in search of innovation. However, there are countless stories of startups that have run out of funding whilst trying to navigate their way through what are often slow-moving, risk-averse, and complex organisations. Here are some key questions for startups to answer before pursuing deals with large corporations: Why do you want or need a deal with a large corporation? “Be realistic about whether the deal is a must-have or a nice-to-have as it generally takes a lot of time and effort to land any kind of deal with large corporations.” Are corporations critical to your business model? For some startups, landing a corporate deal is one of the riskiest options. Revisit the strategy and get advice before moving forward. What kind of deal are you aiming for? Are you selling a B2B/Enterprise product? Do you need access to customers through a channel or platform that a corporation owns or controls? Are you positioning your startup for a future acquisition? Each desired outcome requires different planning and approaches. Which corporations are you specifically targeting, and why? Do your research and compile a target list of corporations that you want to deal with. This could be based on industry vertical, access to technology assets and customer channels or their inclination to invest in startups. When is the right time to approach a corporation? Understand which corporations in your space are active in deal-making with startups, and through what means? Do they have open innovation labs where they actively seek co-development opportunities? Do they have a startup outreach or support program? Are they active in the startup ecosystem through co-working spaces, hackathons or accelerator programs? Do they have a corporate venture capital fund?
  24. 24. Page 24Copyright 2016 Future Asia Ventures
  25. 25. Page 25Copyright 2016 Future Asia Ventures The Smart Startup By Sudarshan Narayan Managing Director, Amplifi SaaS Accelerator India As a startup founder, especially if one is a sole founder, there's so much to do that it can be overwhelming. “It's very common to drown in a lot of non-core tasks and work long hours without being very productive. This is typical of entrepreneurs because they like to be in control of everything. And that's the biggest bottleneck.” There are three ways to being more productive and focusing on the core - revenue, product and customer. 1. Outsourcing - accounting, legal, secretarial, digital marketing 2. Marketplaces - for design (brand collaterals, website, logo) and content (blog, website, email, video) 3. Productivity apps - for calendar scheduling, social media content scheduling and posting, team collaboration, expense management, sales pipeline management, etc Of course, due to the on-demand economy, there are other office related activities that can be availed on demand - like virtual assistants, on demand office, etc. By using a combination of the above, a founder can really focus on smart work and get things done. Remember, as a founder your focus should be on revenue, product and customer success. And, smart work is always better than hard work to achieve the above three KRAs.
  26. 26. Page 26Copyright 2016 Future Asia Ventures 3 Steps to Remain Relevant as a Sales Leader in Exponential Markets The 3 steps to remain a relevant sales resource are: 1. Drive your business towards building a Massively Transformative Purpose that can attract clients, partners and new colleagues. Challenge your top leaders; their sponsorship of this is crucial 2. Be ready to articulate how new disrupters in your market are positioning themselves. How do they scale? 3. Be the advocate for rapid experimentation. Always be testing and turn market hypothesis into facts every single day. Validation and facts will help you lead your team to disrupt rather than being disrupted You are now well on your way to making exponential sales! Enjoy! By Lars Lin Villebaek Founder Sprinthero Denmark Today’s disrupted markets are being taken over by new incumbents, who create new game rules at a breathtaking pace while leaving behind most linear thinking businesses and their sales leaders. Those who react to the change in time can fight back through a “Massive Transformative Purpose”, algorithm-driven processes and other “unfair advantages” as described in the hottest literature right now such as the book Exponential Organizations by Salim Ismail et.al. Traditionally, sales leaders have been the ones with the most intimate knowledge about the clients -but when organizations become exponential by nature, sales must look in new directions to remain relevant and value adding! Key activities when selling into -or competing with- exponentially growing organizations are now about positioning your transformative purpose in the right communities and keep learning how to become a relevant component in other people’s business experiments. Both are massively challenging for teams who need to transition away from selling products based on scarcity models and now face abundance while answering questions such as how algorithms can help personalize a new customer experience.
  27. 27. Page 27Copyright 2016 Future Asia Ventures Past Reports by Future Asia Ventures Published August 31, 2015 CLICK HERE FOR DOWNLOAD http://bit.ly/1JYYnYe Published December 1, 2015 CLICK HERE FOR DOWNLOAD http://bit.ly/1UXuJck About the Author – Falguni Desai Falguni Desai has over 18 years of corporate strategy, innovation and M&A experience. She has worked with business leaders at global firms in the financial, digital media, technology and advisory sectors to foster growth & expansion. She is a regular contributor to Forbes on strategy & innovation topics and her research has been cited in The New York Times, The Los Angeles Times, Deal Street Asia, The Paypers and other business publications. She is based in New York and holds a BS in Economics from The Wharton School of the University of Pennsylvania. Published December 1, 2015 CLICK HERE FOR DOWNLOAD http://bit.ly/1UXuJck
  28. 28. Page 28Copyright 2016 Future Asia Ventures About Us Working with corporations, private investor groups and foundations globally to discover and invest in new ventures. We select our clients and only work with firms which demonstrate an authentic commitment to innovation and bold ideas. Our services include: Market Research Startup Business Advisory Venture Sourcing & Due Diligence Media & Business Inquiries: Falguni Desai Managing Director New York, NY faldesai@outlook.com www.futureasiaventures.com

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