Monday, 8 June 2015

As U.S. Accelerators Boom, Venturetec Targets Enterprise Startups In Asia Pacific

Photo : HUBBA Thailand

Startup accelerators are still somewhat rare in the Asia Pacific region, and accelerators for startups that sell to businesses are even more rare.

Venturetec, which launched last month in Hong Kong, aims to fill that gap.
Founded by an Australian IT executive and consultant, Trey Zagante, and backed by corporations that are as yet unnamed, Venturetec plans to provide eight to 12 startups with a year of support rather than the traditional three to six months that many other accelerators provide.
Enterprise startups need more time than consumer startups to develop and sell a product, Mr. Zagante said, and the time spent with Venturetec–six months on an idea, six months on a product–is intended to get startups to the point where they can have “meaningful discussions” with large corporations and start generating revenue.
“No one is taking an Asia Pacific view [of startups and accelerators],” he told Venture Capital Dispatch. “They’re siloed in Australia or Singapore or Hong Kong, so if you look at the whole region, there are exciting opportunities.”
The ecosystem for startups and investors is not as mature in Asia Pacific as it is in the U.S., particularly in Silicon Valley, according to Mr. Zagante. Investors are fewer and are generally less sophisticated–there aren’t as many successful tech entrepreneurs reinvesting their money into startups. Series A rounds in Australia are hard to find because there are only a few active venture capital firms.
This is one reason why the startups need to start generating revenue as early as possible, he said, perhaps by getting a corporation to co-invest based on a prototype or fund development of a proof-of-concept or a product.
“The connection back to the enterprise is really where we’re going to differentiate and where companies are going to be successful,” Mr. Zagante said.
Venturetec will invest $30,000 to $50,000 Australian dollars in a startup in exchange for 10% equity in common stock. It will also provide a variety of mentors–ranging from consultants to Fortune 500 executives to successful entrepreneurs–and will run classes and meetings simultaneously in Hong Kong and Sydney, providing video links when necessary so that no startup team misses anything based on their location.
Startups will have to start presenting and validating ideas in front of enterprise customers “from day one,” Mr. Zagante said.
Venturetec plans to expand into Singapore, which is similar to Hong Kong and Sydney, although China is farther off.
Hong Kong is not a gateway to China, Mr. Zagante said–in China, you have to understand the local market and build local relationships, so “you need to be on the ground.” As for the U.S., there are more accelerators and hence more competition, although two U.S. accelerators–Alchemist Accelerator in Silicon Valley and Tech Wildcatters in Dallas, both focusing on enterprise startups–have offered useful advice.
Over time, Venturetec expects to work more closely with corporate venture efforts and specialize across different vertical markets. Current areas of interest are banking, financial services, telecommunications, media and technology.
“There are exciting things happening in corporate innovation,” Mr. Zagante said.

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