future asia ventures 2016 outlook final

Copyright 2015 Future Asia Ventures

Corporate Accelerators

2016 Outlook

December 1, 2015


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Table of Contents

• Executive Summary

• Global Overview

• Asia Overview

• FinTech Overview

• 2016 Outlook

• Index: Corporations List


Executive Summary

Large corporations continue to see the value of engagement with startups to enable innovation. In 2015, 31

new corporate accelerators were launched bringing the total to 85 corporate accelerators worldwide.

Many companies are launching their accelerators in cross-border locations away from headquarters. Some

are expanding their existing accelerator programs to new cities abroad. Europe leads the world with 40

corporate accelerators, while Asia Pacific has 18.

Of the 18 Asia Pacific corporate accelerators, 10 launched in 2015. The region has strong startup and

accelerator ecosystems in Hong Kong, Singapore and Bangalore. Kuala Lumpur is poised to become a key hub

city for startups as government support and private funding continue to increase.

By sector count, technology and financial services lead the corporate accelerator count. FinTech focused

accelerators make up 16 of the total programs. The FinTech sector, which has a long history, continues to

evolve with new players in mobile wallets, payments, lending and the block chain.

As corporate innovation programs continue to see popularity, accelerator programs are likely to increase

with new launches and cross-border extensions. Corporations are also expected to try new formats which

don’t involve equity ownership, as they look to engage more broadly with startups.


Global Overview


1 13

12 13

24

31

2009 2010 2011 2012 2013 2014 Dec 12015

2015 witnessed a “fever pitch” level of 31

new accelerator launches.

Number of Corporate Accelerators Launched Each YearWhat’s Happening in 2015?

Existing accelerator programs are

launching in other cities, creating

an expanded geographic footprint

for engagement with startups.

As Europe and Asia experience a

growth in their venture and

startup ecosystems, more

companies in those regions are

beginning to launch programs.

Several startups gained “unicorn”

status as their valuations reached

beyond the $1 billion mark. This

has led large corporations to take

notice of potential disruptors.

Source: Company Websites and Florian Heinemann Accelerator website www.corporate-accelerators.net

Corporate Accelerator Launches Reach “Fever Pitch” in 2015


2015 is a Strong Launch Year for All Regions

1

2

7 7

10

1 1 1

8

5

13

11

1

2

1

4

10

2009 2010 2011 2012 2013 2014 Dec 1 2015

Americas

EMEA

APAC

Number of Corporate Accelerators Launched Each Year by Region


Showcase: Microsoft Ventures Accelerator


27 40 18

Corporate Accelerators by Region

85 Corporate Accelerators Worldwide, With Europe in the Lead

The global corporate accelerator count stands at 85. The US has historically been the strongest

venture and startup economy, however in recent years, Europe has built up vibrant ecosystems.

Germany and the United Kingdom, the top countries, both have 10 accelerators each. In Asia, 18

corporate accelerators exist, 10 of which were launched in the current year in key hub cities like

Singapore and Hong Kong.

Around the World


Technology & Financial Services in the Lead

Technology, 19

Financial Services, 16

Media, 13

Consumer, 6

Health, 6

Telecom, 6

Education, 4

Internet of Things, 3

Travel &

Entertainment, 3

Cross Industry, 3

Retail, 3Logistics, 1

Energy, 1

Real Estate, 1

Corporate Accelerators by Sector Focus


Showcase: District CoWork


Asia Overview


Asia Pacific’s 18 Corporate Accelerators

Hong Kong

• DBS – Financial Services

• AIA – Digital Health

• blueprint by Swire Properties – Enterprise Software

• Infiniti – Smart Cities & Internet of Things

• SuperCharger – Financial Services

Kuala Lumpur

• Tune Labs – Technology

• Telekom Malaysia - Telecom

Singapore

• Singapore Press Holdings – Media

• Telstra Muru-D – Cross Sector

• Unilever Foundry – Consumer

• AIA-Konica – Digital Health

Sydney

• Telstra Muru-D – Cross Sector

Bangalore

• Tlabs - Media

• Target – Retail

• Pitney Bowes - Technology

• Microsoft Ventures - Technology

Beijing

• Microsoft Ventures - Technology

Asia Venture Funding $B

$18

$25

$0

$5

$10

$15

$20

$25

$30

2014 Q1 - Q3 2015

Source: Venture funding data provided by Thomson Reuters

Melbourne

• National Australia Bank Labs – Financial Services


3 Ways Asia Can Create Its Own Startup Narrative

Asia is at a critical inflection point. The region has seen a swell of new programs and venture funding

which supports startup growth. While the U.S. ecosystem has been obsessed with unicorns and large

valuation rounds, Asia has a chance to shape its own conversation on startups. Asia’s startup hubs can

promote a more meaningful business dialogue about the risks and rewards of entrepreneurship. Here

are three considerations:

Founders should be encouraged to

announce their revenues and talk

about the number of units sold or

customers gained. Everyone in the

ecosystem benefits when this

information is shared more

regularly. Founders and investors

can quickly identify risks and

opportunities. Valuation and

funding rounds can be the earned

metric rather than the sole focus on

venture related media coverage.

As startups form, gain traction, and

overcome hurdles, founders should

be encouraged to share their

stories in real-time. When startups

share these stories, others don’t

have to repeat the same mistakes.

From this, a stronger, more

informed and educated ecosystem

emerges, creating a true

community, benefiting the

employees, customers and

investors.

The startup failure rate is high,

estimated at 90% in some cases.

When the media shames founders

for failures, the picture is distorted.

Failed startups quietly hide away

never telling anyone what

happened. Meanwhile successful

startups receive an undue amount

of attention. If journalistic coverage

of these failed companies can be

handled with curiosity and respect,

a more objective narrative can

emerge.

Announce Metrics Share Lessons Learned Remove Shame


Asia Pacific’s Next Hotspot?

Malaysia’s Startup Ecosystem

In recent years, Malaysia has been building up a thriving startup

sector with several government funded and privately funded

programs.

Key Statistics

85+ venture capital firms

750+ startups

Accelerator Programs

1337 Accelerator

MaGIC ASEAN Accelerator

MaGIC Distro Dojo Accelerator with 500 Startups

MaGIC Social Enterprise Accelerator

MSC Malaysia Startup Accelerator Lite

Telekom Malaysia Innovation Exchange (corporate)

Tune Labs (corporate)

Key Events

2015 – MaGIC launches ASEAN Center for Entrepreneurship

2015 – MSC status for startups (tax exemptions, incentives)

2014 – MaGIC established

2014 – Plans begin to transform Cyberjaya into Global Tech Hub

Source: TechinAsia, F6S.com, MaGIC, The World Bank

Malaysia Facts & Figures

• Govt: Federal Constitutional Elective Monarchy

• Country Population: 31 million

• Greater Kuala Lumpur Population: 7.5 million

• Kuala Lumpur City Population: 1.5 million

• Country Annual GDP Growth: 6.1%

Kuala Lumpur – Malaysia’s Startup Hub

Map of Southeast Asia


Showcase: blueprint


FinTech Overview


What is FinTech?

The FinTech sector is made up of 8 categories:

1)Peer-to-peer lending platforms

2)Payments & mobile wallet apps

3)Equity crowd funding platforms

4)Robo-Advisor platforms

5)Blockchain enabled software

6)Financial data analytics software

7)Brokerage & trade systems

8)Treasury & financial risk systems

FinTech Defined

Peer-to-Peer Lending Payment & Mobile Wallets

Block chain / Bitcoin Data Analytics

Equity Crowd funding Robo-Advisors Brokerage & Trade Treasury & Financial Risk

Consumer Focus Enterprise Focus

FinTech Definition:

A portmanteau of the words financial and technology

used to refer to both enterprise and consumer focused

apps and software which are used in financial services

transactions, record-keeping and analysis.

The term is often used to describe the recent boom in

startups focusing on such technologies, however,

financial technology has been developed and used by

firms and individuals for several decades and continues

to evolve.


Dynamics in the Global FinTech Arena

As with most sectors, regional differences exist. The US and Europe have a strong mix of startups in almost all of the subcategories

of FinTech. In Asia, however, the sector has the potential to make a meaningful impact by improving financial access and financial

inclusion for certain populations. Unbanked and under-served populations are creating demand for efficient and tech-enabled

lending and payment tools.

A Unique Snowflake

East West Divide

“While FinTech is currently gaining a lot of traction globally, it is important to recognize that the various geographies have

different drivers in their respective ecosystems. FinTech in developed economies in Europe and the US come from a basis of

innovation and adding value, while FinTech in developing economies in Asia are propelled by a critical need to address pain

points which are acutely felt in their respective economies.”

-Gerben Visser, Cofounder & Managing Partner, Singapore FinTech Consortium

In many ways, the Fintech sector differs from other startup categories. The financial services sector is highly regulated, with rules

that aim to protect the investing public and prevent systemic risk or fraud. Tech-enabled financial services startups must pass the

same regulatory scrutiny as traditional players, creating a longer timeline for launching in each jurisdiction.

For example, in the US alone there are 10 regulating bodies which oversee different segments of the financial system. Each state

also has its own banking authority. As such, entrepreneurs in this sector tend to be more experienced and domain sector experts,

compared to other tech sectors.


Voice of the FinTech Entrepreneur

"I've learned you should only work with people you can trust and

that even small gaps in trust between people must be surfaced

and dealt with quickly. Startups need to be able to make decisions

and move much faster than larger businesses, and this requires

trust.“

- Tommy Nicholas, CEO (USA)

“Hiring the right people is the most crucial thing in a start-up.

Apart from skills, I only look for two traits: the ability to execute &

the constant eagerness to learn.”

- Nicolas Christaen, CEO (Belgium)

”I realized after founding Datavore that it's not as simple

as having an innovative approach - that's a good start but what's

more important is the ability to get buy in from others or to run

with it yourself. Ultimately, without execution it doesn't matter

how great your idea is."

- Jake Perlman-Garr, CEO (USA)

“The key is to create buzz, and to start doing it long before you

look for funding. Whilst it's tempting in the early days to keep

your plan under wraps - because you're in 'stealth' mode or

you're not even sure it is the plan yet - my recommendation is to

beware being too cautious.”

- Elly Hardwick, CEO (United Kingdom)

FinTech Startup CEOs Share Their Insights and Advice on Entrepreneurship


Voice of the FinTech Entrepreneur

"Being a CEO has been very humbling. You need to open yourself

up to stakeholders and mentors and be very vulnerable to get

good feedback."

- Shaheen Kanda, CEO (USA)

“For us, our shared vision, shared values and communications

systems are critical. They keep our globally dispersed and diverse

team aligned, motivated and coordinated.”

- Richard Eldridge, CEO (Philippines)

"Taking on this challenge has made me more appreciative and

made me a better businessperson. I've developed enormous

respect for those before me who have risked to create.“

- Ian Rosen, CEO (USA)

"You have to face the inevitable reality that building things

properly will take twice as long and be twice as hard as you were

originally anticipating. Eliminate any distractions that steer away

from reaching that all-important goal.“

- Mike Morris, CEO, Slide Network (USA)

FinTech Startup CEOs Share Their Insights and Advice on Entrepreneurship


2016 Outlook


The Future of Corporate Innovation

The Pursuit of Innovation

The pursuit of innovation has pushed large companies to launch

accelerators, incubators and hackathons. Some companies

succeed and others don’t. Why the disparity? How can companies

crack the code and reap the most benefits from these

investments? There are no easy answers, but there are a few

necessary elements.

The Elements of Innovation

First there must be a problem, an uncomfortable situation, an

inefficiency. Innovation cannot be motivated unless something is

broken. The old adage still holds, “Necessity is the mother of

innovation.”

Time and resources are important. Companies who want to

succeed in innovation must allow enough time. Innovation cannot

cater to quarterly earnings cycles. The answer comes to us when

we least expect it. And once this happens, companies need to fund

prototyping, testing and several variations before the final product

is rolled out.

But what leads us to these answers in the first place? Do

companies need to provide snacks, ping pong tables and racquet

ball courts? Do employees need massages and laundry service at

the office?

Unleashing the Potential Within

According to James Layfield, CEO of Central Working, “Physical

space and setting only make up 25% of creativity. The real key to

innovation and creativity is unlocking the potential within

someone.”

His company, which designs and leases space to corporations and

small startups, is delivering a new concept which he believes holds

the key. “We believe that community has collapsed in Western

societies, so we are creating a workplace environment that is

caring, helpful, even loving. We provide confidence and

community to make sure people succeed at work.” says Layfield.

Innovation takes place when a person can see the realities before

them clearly, without panic or stress. Old-fashioned command

and control style management doesn’t work in the innovation

arena. The environment that Central Working creates is one where

people feel listened to, encouraged, connected and ultimately

empowered. His staff and teams at the various spaces are

specially trained to evoke more open communication and support

people.

A person with time, resources and the motivation to create

something new won’t succeed until the human side is addressed.

Companies that can provide this level of support for their

innovation teams are on the right path.


The Future of Accelerators

Large companies around the world are beginning to draw valuable ideas for new products and services,

while supporting younger startups in the process. Accelerators have become the defacto program for

companies that want to interact with startups. They provide a structured environment for both parties to

explore and learn. In the coming year, we expect to see companies expanding and augmenting their

accelerators to increase their level of engagement.

As more accelerator programs launch, attracting the

best entrepreneurs and startups will become

competitive. Companies will need to increase their

touch points with startups through new formats.

We will likely see corporations using the following types

of programs to engage with more startups without

equity ownership:

Business plan competitions

Crowd sourcing

Hackathons

Mini labs

Paid product pilots

The largest companies with accelerator programs are

likely to want access to ecosystems in other regions.

Several technology and financial services players are

beginning to launch multiple city accelerator programs.

This allows them to interact with mobile first markets,

different socio-economic pools and growing talent

bases. Hot spots for cross-border corporate accelerator

launches:

Global Hubs: Emerging Hubs:

Hong Kong Bangalore

London Berlin

New York Tel Aviv

Silicon Valley

Singapore

New Innovation Formats Cross Border Launches


Showcase: Rise New York


Index: Corporations List

Singapore Press HoldingsIntel Corp

YLESamsungIngram Content Group

YandexQualcomm IncING Group

Yahoo!PWCInfiniti

William Hill plcProSiebenSat.1 MediaImmobilienScout24

Wells Fargo & CoPitney Bowes IncIBM

Walt Disney CoPearsonErnst & Young

Virgin MediaPCH InternationalE.ON SE

Unilever plcOrangeDPD UK

Tune GroupNordea Bankdpa

TravelportNikeDonnelley

Times of IndiaNational Australia BankDeutsche Telekom AG

TelstraMondelez InternationalDentons

Telenet Group HoldingModern Times GroupDBS Group Holdings Ltd

Telekom MalaysiaMicrosoft VenturesCoca-Cola Co

TelefonicaMETRO AGCitrix Systems Inc

Telecom ItaliaMasterCardCitigroup Inc

Techno GymLa PosteCisco Systems Inc

Target CorpL BrandsBNP

blueprint by Swire PropertiesKaplanBBVA

Standard CharteredJohn LewisBBC

SprintIPG Media LabsBayer

Note: Some companies have launched multiple accelerators so count may not total 85


Non-Profit Showcase: Ocean Recovery Alliance

www.oceanrecov.org

Ocean Recovery Alliance is focused

on innovative programs,

collaborations and awareness

building which help restore the

health of the ocean.

A non-profit organization, it is one

of the first to work with both the

United Nations Environment

Programme and The World Bank.


About Future Asia VenturesFalguni Desai is the Managing Director of Future Asia Ventures. She has

almost two decades of experience working globally at the intersection of

the financial services, SaaS and media sectors. She works with

multinational corporations and financial institutions to foster business

growth and launch innovation programs including accelerators,

incubators and other formats. Falguni holds a BS in Economics from The

Wharton School of the University of Pennsylvania.

Media & Business Inquiries:Falguni Desai

Managing Director

New York, NY

[email protected]

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