When choosing an incubation programme or an innovation partner, entrepreneurs and  organisations need to be aware of their underlying business models

Singapore’s start-up ecosystem has been growing fast. The number of startups here has increased by more than three times in the past decade[1]. One only needs to visit the startup enclave LaunchPad at One north to find out how vibrant the startup scene is. The JTC hub is home to more than 800 startups and close to 50 incubators[2]. Incubators in the ecosystem play an important role behind successful startups by providing targeted business assistance at very early stages of the company.

In recent years, I have had the chance of interacting and collaborating with different incubators in Singapore and overseas. Although many of them offer similar business assistance, they have vastly different business models which define their priorities. I would classify incubators into four different categories:

• Teacher
• Agent
• Merchant
• Builder

1. The Teachers

The “Teacher” operates the incubation program similar to a MBA program. They are a school for startups. After the application and admission process, the startups will be put through classes, trainings, and consultancy to get themselves ready to pitch their ideas to the selected investors. There will also be networking events and parties where startups get connected to the who’s who.

The secret sauce lies in the inherent good quality of their applicants. To succeed, they need to develop an outstanding brand name to attract the best candidates. Y Combinator is one of the most successful “Teacher” type incubator, and other notables include 500 Startups, AngelPad, Chinaccelerator. There are many more trying to follow this model. However, their successes are extremely difficult to duplicate. It is akin to creating another Harvard MBA program in Singapore.

2. The Agents

The “Agent” type of incubator typically help start-ups to reach out for customers or investors in a different region. In some variations, the Agents also help large corporates to search for disruptive innovation.

The “agent” is a viable business model because there are real needs for both startups and corporates. Besides the plain vanilla servicing fee, Agents often provide additional services such as market research and consultancy to generate more income. The paying customers are the core of their business. Agents have a strong imperative to maintain good linkages with customers and ensure efficient operation to bring the information/start-ups that customers are interested. Some of the “agent” types incubators are LabCentral, Plug&Play, and MBC Biolabs.

3. The Merchants

The top priority for a merchant is to sell its own product or service to its customers. Similarly, Merchant-type incubators are most willing to help start-ups whose successes better market their products or services. They are usually incubators belonging to large corporates.

Necessarily, Merchants spend a lot of effort on marketing. Sometimes, its whole incubation programme is supported by the marketing and sales budget.  They would love to organise or participate in high profile events and promote incubatees’ success stories to sell their own products. Some of the “Merchant” types incubators are Huawei i5Lab, HP Enterprise Incubator, and Microsoft Accelerator.

Also read: Accelerators versus incubators: Which one should your startup go to?

4. The Builders

The Builders are creators of new ventures. Typically. they are small outfits that build companies using their own ideas and resources. Unlike venture capitals, the Builders take a different approach in starting a new business. They pull business ideas within their own network and form internal teams to develop them. These teams spend most of their time pushing the product into the market and focus little on raising funds. It is natural process of how a business owners start their new ventures and has been a rising trend in the startup ecosystem.

The Builders has a much higher success rate of starting a new company. The startup projects are initiated by experienced and resourceful entrepreneurs who are actively looking for new business opportunities. More importantly, the projects are driven by an internal team who are tightly knitted through previous start-up projects. There are also economics of scale since the teams are able to re-use infrastructure and best practices across different projects.

At the core, the venture builder model is centered around internal teams led by experienced entrepreneurs. Although it is a resource-intensive model, there are some notable examples including Rocket Internet, Obvious Corp, Incube Labs, JCS Venture Lab, and Betaworks.

Not all business incubators are created equal

When choosing an incubation programme or an innovation partner, entrepreneurs and  organisations need to be aware of their underlying business models. Not all business incubators are created equal, so is their value to your business. Understanding them and selecting the right one could be the first step of your challenging journey as an entrepreneur.

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References:

1. Singapore Department of Statistics
2. SPRING, More support for startups to growth locally and globally

Editor’s note: e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

Featured Image Copyright: bozenafulawka / 123RF Stock Photo

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This year’s edition of ORIGIN will be held in Malaysia on June 21, 2019

ORIGIN by TechNode — an international conference that aims to examine the latest developments in ASEAN’s and China’s tech startup scene – is back for its second edition. It will be held in Kuala Lumpur, Malaysia, on June 21, 2019.

The event, which saw its inaugural run at SWITCH 2018, will be collaborating with the Malaysia Tech Week 2019 this year. ORIGIN will be expanding beyond the shores of Singapore to help more people around the Southeast Asia region understand why and how to get involved in this new stage of China-ASEAN development.

A conference to bridge China & Southeast Asia’s tech ecosystems

According to Tan Shi Hui, Country Manager, TechNode Global (SG), “ORIGIN aims to facilitate more interaction and cross-pollination between China and Southeast Asia’s sharing economy by bringing international industry leaders and technology-changers globally to different Southeast Asia’s cities.”

“Attendees will gain insights on the latest trends and developments in China’s vibrant tech scene and Southeast Asia’s rapid growth landscape,” she says.

Tan adds that the conference is aligned with TechNode’s vision — to be the number one platform bridging Chinese and global tech ecosystems.

“We recognize that Southeast Asia’s tech ecosystem is booming and as China’s digital economy matures, Chinese tech firms increasingly look to Southeast Asia for growth opportunities. With our Southeast Asia regional office set up in Singapore a year ago, TechNode aims to power up the bridge between Southeast Asia and China.”

The ASEAN-China Synergy

ORIGIN’s conference agenda consists of four hours worth of content uncovering insights on the latest trends and developments in China’s vibrant tech scene and Southeast Asia’s rapid growth landscape. This would include topics such as fintech, AI, e-commerce, venture investments, and micro-influencers.

The agenda boasts of a stellar line-up of household names in the Southeast Asia tech industry, such as Sharmeen Looi, Co-founder at ShopBack Malaysia; Yeoh Chen Chow, Co-Founder at Fave Group; Ng Sai Kit, Chief Executive at Captii Ventures, and Navin Danapal, SEA Director at SOSV to name a few.

Also Read: Smart Axiata’s Young Innovator Program names top 5 teams in Impact Hub incubator

The speaker roster also includes the likes of Maggie Long, Director of Global PR & Communications at Kuaishou Technology, and Dr. Lu Gang, CEO & Founder, TechNode, to represent China’s tech scene.

Tan sums up the content strategy nicely, “Southeast Asia is about five to six years behind China; we can learn from the challenges China faced, the lessons have they learned, as well as what paths to follow.”

“One strategy for Chinese VCs is not to invest directly into Southeast Asia but rather to help their portfolio companies get into specific countries,” says Tan.

“Generally, Southeast Asian startups are open to Chinese money. We believe Southeast Asia is now in a strong position to ride this wave and also better prepare to resolve similar challenges if they surface in Southeast Asia,” she adds.

A freebie for the #e27community

At e27, we avidly support and participate in ecosystem building initiatives. These help us stay true and relevant to our mission — empowering entrepreneurs with the tools to build and grow their businesses.

Similarly, TechNode hopes to reach out to a wider community through e27, specifically those based in Malaysia to inform them about ORIGIN.

We are inviting the #e27community to gain access to ORIGIN by TechNode and other partner events happening from 19th – 21st June at  Malaysia Tech Week 2019 by submitting your request here: https://www.surveymonkey.com/r/2FBDYSF

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These curated deal-making sessions will be organised based on sectors such as banking and finance, fintech, transport and mobility

Singapore launches matchmaking initiative for startups and potential investors [KrAsia]

The Monetary Authority of Singapore (MAS) and Enterprise Singapore has jointly launched Deal Fridays, an initiative that will match startups in the city-state with investors.

These curated deal-making sessions will run every Friday for 19 weeks, from June 21 to October 25. They will be organised based on sectors such as banking and finance, fintech, transport and mobility, and more.

Deal Fridays is meant to connect startups with potential investors that are keen to tie up with companies with new ideas and scalable business models in their fields. The idea is to limit the time that startups normally need to burn through while seeking new investors.

This initiative is part of the Singapore FinTech Festival (SFF) x Singapore Week of Innovation and TeCHnology (SWITCH) event, which will be held in November.

Nikkei acquires 26% stake in Indian media startup NewsRise [press release]

Nikkei announced today that it has acquired 25.99 per cent of the outstanding shares in Indian media startup NewsRise Financial Research and Information Services.

Under the brand of Nikkei Markets, Nikkei and NewsRise have been jointly providing English-language news on Southeast Asian stock markets since April 2017, independently reporting from Malaysia, Hong Kong and Singapore.

With the capital tie-up, Nikkei and NewsRise will step up co-operation to deliver  quality and quantity of the region’s market news.

NewsRise was founded in 2013. It is a publisher of real-time financial news, research and information for currency, debt, equity and resources asset classes for use by banks, broking houses, asset managers, corporate treasurers and individual investors. It has news bureaus in Mumbai, New Delhi, Kolkata and Bengaluru which are manned by competent business journalists and news editors.

The investment in NewsRise is one of Nikkei’s strategic initiatives to expand its footprint in Asia. Nikkei has recently acquired a majority stake in DealStreetAsia, a Singapore-based financial news site with a focus on corporate investment activity in Southeast Asia and India.

Korean lending marketplace PeopleFund bags US$35m Series B extension [DealStreetAsia]

South Korean lending marketplace PeopleFund has raised US$35 million as an extension to its Series B financing round, led by Lending Ark Asia Secured Private Debt Fund, a secured private credit strategy of Hong Kong-based CLSA Capital Partners.

New and existing investors including Shinhan Invest Corp. and D3 Jubilee also participated in the round, according to a statement.

The funding will help PeopleFund pursue international expansion as part of its strategic plans. The investment by Lending Ark comprises both secured debt and equity financing. The US$30 million debt financing will allow PeopleFund to scale up its lending business.

China opens Nasdaq-style board to lure tech firms back home [TechCrunch]

China’s much-anticipated Science and Technology Innovation board officially launched in Shanghai today, marking Beijing’s major step in drawing high-potential tech companies to list at home.

The new Star Market, first announced by President Xi Jinping in November, is expected to be a key fundraising avenue for tech companies from an array of stages, given its criteria (link in Chinese) are less stringent than other domestic boards. Beijing has over the past year encouraged local firms to become more self-reliant in producing chips and other core technologies as an escalating trade war threatens to cut China off the U.S. supply chain.

The new startup board began taking applications in late March and have so far received applications from 122 companies, according to information from the Shanghai Stock Exchange .

Enterprise conversational AI startup Yellow Messenger raises US$4M [press release]

Yellow Messenger, a provider of conversational AI solutions to enterprises, announced today that it has raised Series A funding of US$4 million from Lightspeed Venture Partners and prominent angel investors.

The angel investors that participated in the round include Phanindra Sama (Founder, Redbus and CIO of Telangana State), Kashyap Deorah (Founder of Hypertrack, Author of Golden Tap), Anand Swaminathan (Senior Partner, McKinsey & Co.), Prashant Malik (Co-founder, Limeroad), Nishant Rao (former MD, Linkedin India), Kunal Bahl (Co- founder Snapdeal) , Rohit Bansal (Co-founder, Snapdeal), Monisha Varadan (Zephyr Ventures), and Alap Bharadwaj (APAC Innovation, Google).

Yellow Messenger plans to use the funds to further its tech capabilities, and also to expand its customer success teams and presence in high-potential markets across Asia, the Middle East, and other emerging markets.

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With 45 employees and with no office, Johannes Larsson’s two-year-old startup Financer.com generated US$1.69-2.25M in revenues in 2018 itself

“As a child, I didn’t like going to school,” he says. “I was more interested in traveling around the world.”

And Johannes Larsson not just fulfilled his wish, but his globetrotting has also led him into the world of startups, or rather the world of uncertainties.

A Swedish by birth, Larsson stumbled upon online marketing when he was just 15 years old. He started learning about it and building websites. He sensed a huge opportunity in this space. This is when he felt there was no point wasting time studying in school and college when he could make money at a very young age.

“However, it was hard to make any money out of this business, but I was intensely curious and continued to experiment with different methods,” he recounts his story for e27. “I worked hard but I couldn’t still earn enough money until I turned 18. The money was still considerably less than a thousand euros per month. However, I was happy and this small amount kept me going,” he goes on.

Larsson continued down on this path for one more year. When he turned 19, he started making enough money to meet both ends. It was this year he moved to Malta and decided to work full-time on digital marketing.

Also Read: How the son of a humble watch repairer became the owner of a multi-million dollar realty tech startup

“Although it was hard to get by with less than EUR1,500 per month in Malta, I enjoyed this new life. I lived cheaply and spent most of my days working,” he says. “But what was more important was that I got to meet new entrepreneurs, who had many more years of experience than I did. I learnt a lot from them.”

By the time he turned 21, his business reached a level that he made his first hire. Shortly after, he hired one more person. He also rented an office, which was something he would not have thought about before.

“It felt great having an office, but a year later I started getting bored. I felt a little bit like an office rat, which was the last thing I wanted to become. I decided this lifestyle wasn’t what I wanted. So I closed the office, let go of my employees, and went out to travel the world. At that time, I wanted to build something that could scale without sacrificing my lifestyle,” he shares.

From then, Larsson decided to travel for at least six months in a row, without having a base, home or any plan, although it felt to him like going a bit backwards. He was still running the business. But at one point of time he realised he could not run the business alone; he had over 400 projects (affiliate sites) in hands and didn’t know where to focus. Time wasn’t enough to handle all of it on his own, and he felt stressed and asked himself whether he had taken the right decision.

“This is when I was forced to think bigger,” he adds. “I was fed up with having my focus all over the place, doing too many things at once, but nothing really good. I realised that I needed to create something valuable instead of dividing my energy and resources to complete many half-done projects. So I picked one project that was the most successful, and completely withdrew the focus on the other 399.”

It was a turning point in his life.

The Inception

Launched in 2016 in Sweden, Financer.com is a finance products’ price comparison portal. A user can compare different products such as loans, saving accounts, credit cards, insurances, and cryptocurrencies.

As the business was picking pace, Larsson realised it would be impossible to grow and scale the business without a team. However, he could not imagine going back to the 9am to 5pm office work culture, monitoring employees. Larsson decided to find a way out.

“I hired my first freelancer, who I call intrapreneur today. The idea was that instead of telling your employees what to do, you hire people with the entrepreneurial spirit to help you steer the ship and to build the business together,” he says.

Also Read: Infightings, quitting of key people didn’t deter this entrepreneur from realising his dream

“It was a success. I loved working remotely with him because it allowed more flexibility in my life. After a while, I continued to hire more freelancers, as it became apparent that it was more of a win-win, both for me and the person who I worked with,” he adds. “We built performance-based payment models that motivated the intrapreneur, and it made them inspired to push harder. They were given heavy responsibilities and were rewarded accordingly.”

As of now, there are more than a dozen intrapreneurs in the company; everyone having a stake in the game and being responsible for their own markets. As revenue grew, the company hired more people and improved its product marketing faster.

“I feel this intrapreneur model will become more popular in the years to come, as it promotes growth and development in the company because everyone in the team wants to give their best,” he sounds confident.

Now, with a team of 45 people– all remotely working —  in 26 markets across Europe, America and Asia, Freelancer is a massive success. The company has presence in Indonesia, Kazakhstan The firm generates millions of revenues annually, and in 2018 alone, Financer generated around US$1.69 to US$2.25 million in revenues.

Larsson still keeps on globetrotting, seeking new opportunities for his business and for himself.

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It’s a match made in startup fundraising heaven

For years, we have been privileged to be at the center of it all – we have seen how Southeast Asia’s tech ecosystem has grown with the explosion of new ideas, and we have done our best to make sure that everyone gets the chance at the spotlight.

But for us at e27, empowering entrepreneurs with the tools to build and grow their companies is both mission and ethos; the very reason that we exist.

Our mission dictates that we do more than just feature, more than just announce, and more than just cheer on. Because while yes, we can do all that, we also need to do something about the fact that for most startups with great products, lack of funds and resources hold them back.

That’s why in Echelon 2019, we featured a Capital Stage to talk about the funding landscape of the region. We also deviated from the previous “speed-dating” format and made Echelon Connect investor-startup meetings longer to open the opportunity for deeper discussions.

But we also understand that a single event is not enough. We understand that while fundraising is about potential, it is also about relationships.

That’s why we’re happy to announce that we have partnered with Wholesale Investor to help us get you access to over 21,000 investors.

Get in front of investors

Wholesale Investor is APAC’s leading investment platform that showcases private, pre-IPO, and small cap listed opportunities to their network of high net worth, professional, and international investors and investment groups.

Startups who sign up with us will also get their significant milestones highlighted to both e27 and Wholesale Investor network – it’s a great way to get into the radar of potential investors and partners.

This partnership between e27 and Wholesale Investor utilises the recently launched Capital Raising Intelligent Investment Secondary Platform (or CRIISP), an end-to-end SaaS capital raising platform that digitises the capital raising process.

According to Wholesale Investor and CRIISP Managing Director and Co-Founder Steve Torso, CRIISP was built on the foundations of the belief that the most important component of raising capital is to get in front of investors.

With CRIISP, startups not only get access to a vast investor network but also to build and manage their relationships by engaging in question and answers through direct messaging, promote dealrooms to interested investors, and track investor interest.

We are looking forward to everything that this partnership would offer. Interested? Curious? Sign up to our mailing list to be the first to know how e27 x Wholesale Investor can help you get the funding you need.

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