Developing a corporate innovation strategy is no easy feat. Akin to cooking a good dish, aside from ensuring that you put in place the best ingredients and chef, adopting the appropriate cooking methods and processes is critical to delivering that dish that you so desire. 

Likewise, aside from taking into consideration factors such as innovation culture, resources, and the executing team, adopting the appropriate innovation approach is key to determining the outcome of your corporate innovation efforts. 

With that, this article highlights an innovation approach that has been gaining traction that could serve to enhance your corporate innovation strategy: the Pre-accelerator. 

Uncovering the pre-accelerator

Most corporates that have been early in the game are familiar with innovation approaches such as hackathons, accelerators, startup scouting, innovation challenges, and even venture to build. But what are pre-accelerators? 

Pre-accelerators have only been rising in prominence in the past couple of years, and mainly in US and Europe. Such programmes have been gaining momentum across startup communities, with the increased awareness of the effort and resources required to enable ideas to take flight.

Given so, pre-accelerator programmes focus on equipping entrepreneurs with skill sets and resources to develop their first minimum viable product and establish a strong product-market fit. The foundation required for any good business venture. 

Also Read: How to get into a pre-accelerator programme

Pre-accelerator programmes can be structured from anywhere between eight to 12 weeks, focused on equipping participants in the areas of customer and market validation, prototype and business model development, fundraising, and development of branding and marketing strategies.

Given that resources are highly limited for entrepreneurs at such a phase of development, the ability to gain access to a consolidated platform of high-quality mentorship, resources, and tools is critical to spurring the rise of new innovative solutions. 

Evidently, the sell for such programmes to entrepreneurs is strong, but why has such an innovation approach also increasingly appealed to corporates? 

How pre-accelerators enhance your corporate innovation model

The answer to this is simple – corporates that are keen to collaborate with startups face the same problem as startup ecosystem players that have been early adopters of this approach, the need to enable ideas to take flight.

This applies regardless of whether you are looking at it from a return of investment perspective in the long-term for your corporate innovation initiatives, or just by the very fact that you need these ideas to mature in order for pilots to be plausible.

It applies whether you are looking at an internal or an external innovation programme, in which both would face the challenge of providing the necessary support to further develop ideas generated by staff or entrepreneurs. 

Given so, corporates have been increasingly drawn to adopting such an innovation approach to enhance and complement their existing corporate innovation initiatives.  

Here are a few ways that pre-accelerators can be brought in to enhance your corporate innovation model: 

Increase the return on investment for hackathons

It is undeniable that hackathons are a good way for corporates to crowdsource new ideas and solutions from the broader ecosystem, in which this is especially so if the industry is nascent and mature solutions are far and few. Fostering the rise of new ideas is as such a key innovation strategy in the long-term, to enable corporates to have viable solution providers to work within the years to come. 

Also Read: Ecosystem Roundup: Anchanto raises US$12M; MAS earmarks US$182M more to boost fintech innovation; How Tiki manages to keep employee churn rate healthy

While recognising the merits of hackathons, corporates that have engaged in them often struggle with the long term feasibility of such an innovation programme given the low success rates of ideas that have emerged. This comes with the realisation of the need for post-hackathon support to enable entrepreneurs to further develop their ideas, validate it in the market before the idea is able to take flight in the form of engaging in pilots or raise further funding support. 

Given so, to enhance the return on investment poured into hackathons, pre-accelerators have been increasingly paired with hackathon programmes. This serves to provide structured support for ideas generated from hackathons, enabling ideas to be further developed to produce pilot-ready solutions. 

Serve as the ideal funnel for corporate venture building

Pre-accelerator programmes are unique in that they work with ideas and solutions that are still in very early stages of development (pre-MVP). As the products and solutions are still in the early stages of development, this presents more opportunities for corporates that are looking to collaborate with startups to jointly shape and develop them.

This serves as an ideal pipeline for corporates that are looking to explore new solutions to bring in as new business units and/or to source for new solutions to engage in further development jointly with their venture building teams. 

The ability to jointly shape and develop these solutions through the pre-accelerator programme, also serves to align solutions more closely to internal processes and constraints increasing the likelihood for the solutions to be adopted. Such a pairing capitalises on the merits of open innovation approaches in the ability to source ideas from the broader ecosystem, to strengthen venture building efforts. 

Serve as curated pipelines for corporate investments 

Given that corporate venture arms often focus on solutions that enhance existing business lines, the investment focus of each corporate is a unique one. While startup scouting is often relied upon to bring in investment leads, corporate venture arms find themselves competing with other corporate venture arms and venture capital firms for this deal flow.

These solutions also often do not meet internal requirements, to which corporate ventures find themselves in tricky situations having to exit investments when business units are not able to work with their portfolio company.

Also Read: Meet 6 of our corporate partners who will FORGE their corporate-startup innovation at Echelon

Investing in a pre-accelerator programme to build up a curated pipeline of early-stage ventures has as such been a model that is increasingly attractive to corporate venture arms. Through customising the scope, scale, and theme for these pre-accelerator programmes, corporate ventures are able to foster the development of ideas that are more closely aligned to their business needs.

Through engaging the startups through the pre-accelerator programme, corporates would also have the opportunity to work with the startup for a certain period of time prior to investment. This increases the likelihood of these solutions being adopted internally and enables investments to be made with more certainty on the potential of the startup. 

Perfecting your corporate innovation model

It is of hope that the above has helped to uncover the beauty of pre-accelerators and how they can serve to boost your corporate innovation model. For those engaged in hackathons, pre-accelerators could be that structured post-hackathon support you have been looking for.

For those engaged in venture building, a pre-accelerator programme could provide that steady pipeline of solutions in a sweet spot of development to collaborate with. For those involved in corporate ventures, pre-accelerators could be that curated deal flow pipeline that you have been looking for. 

So if you are a corporate developing your innovation model and/or reviewing your existing innovation strategy, why not consider the pre-accelerator and see how it can complete the dish for you?

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Matthew Tippetts started his professional career as a tech banker about 20 years ago, before moving out to manage portfolios at US-based hedge fund Citadel. This enabled him to come to Asia where he soon discovered the massive gap in terms of the user experience.

“There wasn’t a lot happening in online space. There were a lot of things that could be done to help merchants and get them to really leverage data properly to grow that business. So that’s basically how the idea started,” Tippets recalls.

The first thing that Tippets and his co-founders did was to do a market study. “We wanted to understand how people do payments. So we interviewed 1,800 businesses, about a thousand people, to really understand what people are ready to do and how they do it,” Tippets says.

Tippets wanted to see what the people were using at that time and what the trust factors were out there.

This initiative eventually led to the founding of Cambodia-based fintech startup Clik.

“We wanted to see their interest in some of the services that I was envisioning at the time, and the result of the study was positive. And so we decided to start building up the team, Skye (Skye Cornell, Chief Marketing Officer) and I. We then met the third co-founder, Darren Jensen, along with other co-founders who are all either serial entrepreneurs or tech professionals, fintech professionals,” Tippets continues.

Why Cambodia

In its platform, Clik shares its vision to “create a digital community across Southeast Asia by providing a 100 per cent safe and seamless payment method, suitable for everyone” by building an advanced mobile payment system for enterprises, merchants, and consumers.

In doing so, the question arises on why Cambodia was chosen to achieve this.

“I was at the time in Cambodia, so that was a natural reason. But also it’s mostly because Cambodia, in our view, is the best place for piloting a new technology infrastructure. Here, we have close to more than 80 per cent of internet coverage for the population, where you can get 10 gigabytes for US$7-8. Ninety-five per cent of people here have smartphones, so they have the tools to do mobile payments,” Tippets elaborates.

Also Read: Ecosystem Roundup: Intuit acquires TradeGecko; Synagie proposes US$45M sale of e-commerce arm; Ayoconnect, Wahyoo, Clik, Vesta secure investment

“When we did our feasibility studies and asked questions to people paying in Cambodia, close to 60 per cent of them were already using apps to make payments. One of the payment companies was in 30 per cent of people’s smartphones, which showcased how big the level of penetration is,” Tippets says.

In contrast to what most people believe, Cambodia has a pretty dynamic fintech sector. There are already quite a few players such as Pi Pay, a youth-targeted cashless mobile payment platform.

Phone-to-phone tapping payment

To understand the kind of ecosystem Clik is building, imagine the not-so-distant future where no hardware is required to do a cashless payment.

“We’re looking to enable banks to link bank accounts to the app, so that when you tap with your phone to make a payment, it comes straight out of your bank account, making it practical because it’s completely seamless,” Tippets announces.

Tippets adds that what can be seen now of the company is a little bit like the tip of the iceberg.

“The visible part of the platform is that we help merchants do different things related to data insight. From creating loyalty plans to microtargeting, messaging and so on, all available in the app for the consumer. But beyond that, we have web applications developed for internal purposes, such as building our own customer relationship management and sales force automation system to automate and assist the activation team in reaching out to merchants and converting them,” says Tippets.

“We’ve also built an electronic KYC product that could allow these merchants’ customers to link their bank accounts and onboard customers in 90 seconds when it comes to consumers,” Tippets adds, saying that the e-KYC is where they really hit it off when they first showed it to the target merchants.

“We decided to prioritise the e-KYC and it’s a critical part to the customer journey, whether it’s a merchant or the customers. A merchant can just download the app and look through the application to fulfil all the necessary Know-Your-Client, which is similar to what a bank would require, but in an automated way,” he continues.

Also Read: Cambodian fintech startup Clik raises US$3.7M in seed funding, announces key hirings

In Cambodia, however, to do the standard KYC, it is required to have a face-to-face check-in.

“To address this, we have an activation team queued up with this sales force automation tool, which can really make it easy for the activation team to target merchants and act on converting these merchants onto our platform. So they would go to a merchant, help them download the app, help them collect all the information they need, and within five minutes, a merchant can be fully KYC,” Tippets breaks it down.

The capability to onboard merchants in five minutes is powerful because it opens up a completely new market, which is where the micro SMEs can really thrive with the elimination of needing a Visa account or hardware tool, as everything is done via smartphone only.

The investment and partnerships preceding the launch

“We were unorthodox in terms of our late commercial launch, as we’re looking to really establish our footing in this space. But we have signed agreements with the equivalent of over 2,500 merchants, and we also have agreements with financial institutions for testing and partnering with our services,” Tippets said.

Even before it was officially launched, Clik manages to secure several investments and international partnerships. The company is also raising for its Series A.

Clik’s leading investor is Openway Group, one of the leading investors in mobile payment and cloud payment systems.

“When we explained it to the founder, Andrew Vereninov, he immediately understood what we were doing and volunteered to help us. And within a call, we got nearly US$700,000 in funding, and we’d been working with them for nearly four years now.”

The company then got another investment from Phillip Capital’s POEMS.

It is also securing a guaranteed license by the National Bank of Cambodia. “We expect to get a license by October earliest. So there’s no longer any regulatory risk before our official launch,” Tippets adds.

Also Read: MYPINPAD and Clik aim to unify the digital point-of-sale industry

In addition to the investments, Clik also utilises MYPINPAD’s enhanced Payment Card Industry (PCI) compliant payment security, as well as facilities that allow integration with existing payment infrastructures.

Being data-driven as the main focus

The recent and on-going funding will be used for a product roadmap.

“Let’s assume that we’re on track with the launch at the end of 2020, by the first half of 2021, we expect to have quite a few more payment capabilities. So we’re hoping to start with Visa, but we’ll add on MasterCard, and most likely UPI and Alipay. We’ve also already been in discussions with a few other financial institutions to be able to link up with their accounts,” Tippets details.

“We also plan on having additional functionalities launched shortly after the commercial launch, with international remittance being one of them. And in the second half of 2021, we will have further data-driven tools around data analytics and artificial intelligence and machine learning to help our customers predict their revenues and also optimise loyalty plans and the micro-campaigns,” Tippets further adds.

“On top of that, we also expect to expand by the end of the year as we’re already well in the process of applying for a patent license in a neighbouring country, which most likely will be Myanmar,” he ends.

The data-payment gap

Right now, according to Tippets, 85-90 per cent of transactions are still in cash in Cambodia, and that is with around 25 mobile payment players existing in the market.

Tippets says that the potential for market growth is huge as there is enough space for quite a few players. He specifically points out the brick-and-mortar businesses, in which there’s a massive fragmentation of payments and of data.

“In Southeast Asia, for retail payment, 97 per cent are in brick-and-mortar businesses, but nobody’s really catering to these brick and mortar merchants to help them gain some of the data-driven tools that the online space has to really better understand that customer base to better cater to them, get them to be more loyal, and repeat purchase and basically drive more value,” Tippets says.

Tippets believes that moving forward, payments aggregators are going to be key in bringing that interoperability between all these different players to be able to grow the business.

Also Read: Without privacy, Asia’s cashless society will only benefit governments

“That’s why … we’re all about building an ecosystem where we can bring a lot of value to our partners, to the merchants and to the consumers, so that they have a good enough reason to use the service six times a day all the time. Because it’s seamless, practical, ultra-safe, and because it’s everywhere,” Tippets closes.

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Image Credit: Clik

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M17’s Japan chief promoted as new global CEO

The story: Taiwan’s M17 Entertainment has appointed Hirofumi Ono as the new global CEO, replacing the incumbent Joseph Phua, who has stepped down from the top post to assume the role of non-executive Chairman.

Ono until recently led M17 Entertainment in Japan.

Under Ono’s leadership, M17 will aim to continue growing into a global live streaming platform.

Who is Ono?

Born in Sapporo in 1974, Ono completed his Bachelor’s Degree in biological sciences, and his master’s degree in science from The University of Tokyo.

After graduation, he participated in several mobile and media startups.

In 2000, he was the founding member and the first employee of CyberAgent Mobile Co., of which he retired in 2008 as Senior Managing Director.

In 2008, Ono co-founded Infinity Ventures, from which he acted as an investor and veteran entrepreneur, to found Rekoo Japan under Sunshine Ranch, Jimoty, Groupon Japan and Farfetch Japan. In addition, he started the “Infinity Ventures Summit”, the largest conference for entrepreneurs in Japan.

In 2017, Hiro started 17 Media Japan.

Ono retired from Infinity Ventures in July, 2020.

Impact investor SEAF Invests in CloudCfo

The story: Global impact investment fund manager SEAF has announced that its Women’s Opportunity Fund, SWOF, has invested in CloudCfo.

This is the second investment made by SWOF in the Philippines.

What is CloudCfo?: Established in 2016, CloudCfo offers the full range of outsourced finance services, including accounting, bookkeeping, tax compliance, financial reporting, payroll, budgeting, financial forecasts, catch-up accounting, strategic financial advisory and virtual CFO services.

Plans with the money: The startup will use the investment to grow faster across three key business areas — investment in technology, further development of its in-house expertise and people, and for the expansion of its services within the market.

India’s Captain Fresh raises US$2.3M

The story: Freshwater fish and seafood supply chain platform Captain Fresh has raised US$2.3 million in pre-series A round of funding.

Investors: Ankur Capital (lead), Incubate Fund India and Silicon Valley based angel investors.

Plans with the money: The fundraise will be used to invest in technologies like computer vision, IoT, bots, data analytics to digitise and drive efficiencies across the supply chain. Additionally, it will expand to new cities and add key hires to build a mission driven world-class team.

What is Captain Fresh?: It is building a trusted seafood supply chain by bringing in intelligence for superior demand-supply matching, enabling e-auctions for sourcing, standardising supplies and maintaining digital traceability systems.

Captain Fresh works with leading brands in the modern trade channel as well as the pioneers in the online meat and seafood space.

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