Global VC firm Accel has unveiled the new avatar of Atoms, an accelerator programme for pre-seed and seed-stage startups in India, Southeast Asia and the UAE. The programme will provide startups access to funding, personalised mentorship, and guidance from top operators and founders.

Since its launch in August 2021, Atoms has invested in 24 companies across two cohorts. The revamped Atoms 3.0 programme introduces a sector-based approach. Through closed groups, early-stage founders can collaborate, interact, exchange ideas, and grow in a more personalised learning environment.

The Atoms 3.0 programme comprises two sector-focused cohorts, each with its own focus and objectives. The AI cohort will be led by Prayank Swaroop while the Industry 5.0 batch will be spearheaded by Barath Shankar Subramanian.

Swaroop spoke with e27 about Atoms 3.0, its objectives, and more.

Excerpts:

What motivated Accel to adopt a thematic approach in its Atoms programme, deviating from the traditional accelerator model?

A sector-focused approach allows us to deviate from the traditional accelerator model with several benefits.

Firstly, it allows startups targeting similar industries and at similar stages of evolution to learn from each other and benefit from industry-specific guidance. This focused approach facilitates deeper assistance, marshalling of resources, and connections to industry experts.

Also Read: SDTA revamps venture building programme for deep-tech startups in Singapore

Secondly, sector-focused cohorts create a more personalised learning environment, enabling better collaboration, interaction, and exchange of ideas among startups. By building a community of like-minded founders in the same domain, we aim to foster collaboration and mutual support among the startups, increasing their chances of success.

Could you explain the key objectives and goals of Atoms 3.0? How has the programme evolved over the years?

Zero-to-one is the most challenging journey for an entrepreneur, as it sets the foundation for the business; that is what Atoms hopes to accomplish for our cohort founders. Atoms is constantly evolving and looking to improve the programme for founders.

Based on feedback from founders in cohorts I and II, we realised that founders want to be part of a community where they can learn from other founders and operators, and these learnings can get amplified if the people in the group are from within their industry.

We launched Atoms 3.0 as a thematic, sector-focused cohort programme with this learning. The idea is companies targeting a similar industry and at a similar stage of evolution get to learn from each other a lot. Atoms 3.0 will have two sector-focused cohorts — AI and Industry 5.0.

The redesigned programme will offer personalised learning, sector-specific mentors, and up to US$500,000 in investment for each selected startup.

Additionally, these cohort startups will get access to Accel’s growing global community. We introduced sector-focused cohorts and a more personalised learning environment through closed groups to foster innovation, creativity, and collective growth among the startups.

What differentiates Atoms 3.0’s Industry 5.0 cohort from the Artificial Intelligence cohort regarding focus and objectives?

The Atoms 3.0 programme comprises two sector-focused cohorts, each with its own focus and objectives. The AI cohort aims to tap into the pivotal rise of AI and its transformative impact on various industries. Startups within this cohort are sought based on their innovative use of AI for business applications and their development of tools that contribute to the AI ecosystem.

On the other hand, the Industry 5.0 cohort is centred around the fifth industrial revolution, which revolves around redefining traditional industries through technology. While Industry 4.0 is focused on automation and AI, Industry 5.0 goes beyond that to emphasise the collaborative synergies between intelligent humans and smart manufacturing machines. Startups in this cohort are classified under three areas: Machines, People, and Processes. They are expected to introduce cutting-edge technologies, sustainable practices, and human-centric approaches to revolutionise industrial operations.

How does the thematic cohort structure of Atoms 3.0 benefit startups in the Artificial Intelligence sector?

The revamped structure of Atoms 3.0 provides a focused environment for collaboration and learning. By bringing together startups working on AI technologies and applications, the cohort facilitates the exchange of best practices, insights, and challenges specific to the AI industry. Startups can learn from each others’ experiences, validate their ideas, and build stronger AI-focused teams. The access to Accel’s mentorship network, workshops on AI best practices, and community events with other AI startups further enhances their growth opportunities and industry connections.

Could you provide insights into the startups’ selection criteria for participating in the Atoms 3.0 programme?

For the AI cohort under Atoms 3.0, we will accept applications from founders based in India, Singapore, Indonesia, and the UAE. For the Industry 5.0 cohort, we are looking for founders from India and Indonesia to apply. We are kicking off Atoms 3.0 with these two cohorts, but as we scale the programme, we also plan to launch other themes.

Given our cheque size of up to US$500,000, we look to support companies seeking to raise under US$2 million. In our past two cohorts of Atoms, we invested across stages, including idea-stage and pre-product companies.

Our focus will be to invest in startups that fall under any of the following:

In AI, we will support AI builders (foundational AI research and products‍), AI enablers (tools for using AI)‍, and AI users.

In Industry 5.0, we will back people, processes, marketplaces, and machines.

What are the expected outcomes and success metrics for startups that go through the Atoms programme?

The idea behind Atoms is to guide startups towards achieving product-market fit (PMF), a crucial metric indicating that their product meets the needs of their target market. Expected outcomes for startups include strong customer validation reflected in a growing user base and high retention rates, accelerated revenue growth, increased market penetration, and improved operational efficiency.

Further, startups that have achieved PMF often attract greater investor interest, which can lead to increased funding opportunities. The programme aims to empower startups to build products that effectively resonate with the market, leading to successful scaling and growth.

Can you share any notable success stories from the previous editions of the Atoms programme?

DhiWise, a DevTool startup from Gujarat (India), exemplifies the transformative power of the Accel Atoms program. Founded by Vishal Virani and Rahul Shingala to solve developers’ real-world problems, DhiWise encountered initial hurdles, including rejection from over 40 investors.

The tide turned with their induction into the Accel Atoms programme, which provided US$250,000 in non-dilutive capital, esteemed mentorship, and access to a global entrepreneurial community.

Over an intensive 100-day period, Accel Atoms nurtured DhiWise’s growth, culminating in the startup winning the esteemed Golden Kitty Award 2021 in the developer tool category.

Also Read: The GEAR: A new accelerator programme for early-stage startups in the built environment sector

Today, with over 30,000 users, a million programming hours saved, and 5000+ installations of their Figma to code plugin, DhiWise is a sterling example of how mentorship and solid support systems can catalyse startup success.

Another notable success story is Fishlog, an agritech startup co-founded by IPB University graduates Bayu Anggara, Reza Fahlepi, and Abdul Halim. Fishlog is revolutionising Indonesia’s fisheries supply chain.

Despite the industry’s challenges, including a 20-29 per cent loss of fish during transportation and storage, Fishlog maximises cold-chain facilities, streamlines the supply chain, and minimises product waste.

Guided by the Accel Atoms programme, the startup successfully navigated initial obstacles, such as raising capital and hiring talent, and has since established infrastructure in 40 locations across Indonesia, built a workforce of nearly 200 employees, and launched the Fishlog Academy for talent development. Its unique business model, featuring a marketplace enabler and an inventory financing pillar, has transformed the fisheries supply chain, empowering fishermen and facilitating industry growth. Poised for international expansion, Fishlog aims to become a community-driven ecosystem enabler for the fisheries industry.

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Image Credit: Accel.

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Deeptech startups — those built on innovations in biotechnologies, robotics, quantum computing, or advanced materials — are central to solving some of our most complex societal and environmental challenges.

Despite their game-changing potential, fundraising for frontier tech entrepreneurs is still incredibly challenging. There is a logic to that.

Investors naturally gravitate to sectors where the cost of experimentation is low, independent of the sectors with the greatest need for innovation, or even where the supply of innovative ideas is the greatest.

The fundamental uncertainty of deep tech at its earliest stages hints at the financiers’ struggle to balance potential with the complexity of execution.

Despite this uncertainty, more VC funding than ever has been allocated to deep tech over the last five years. Yet in 2022, according to Crunchbase and Pitchbook, these numbers represent only a fraction of the total: 12 per cent. Excluding AI, drones, and robotics, we are down to two per cent for all other frontier tech sub-segments, including advanced materials.

This mismatch echoes the tangible impact of deep tech. In a PwC report released last year, climate tech, an overlapping applicative segment, has seen low-impact sectors in terms of GHG emissions gain much higher funding than high-impact sectors like the built environment, agricultural tech, or energy.

There is a reason for that. At its core, the modern venture capital funding model requires investing in a specific type of startup, i.e., those poised for hyper-growth, aiming at US$100+M revenue targets, and built for acquisition (note: it has not always been the case).

If a startup does not fit the model — most early-stage startups don’t — founders can either change their business plan to fit the mould or find a source of funding that better fits the business. That’s alright.

While VC money can be rocket fuel for a startup, it’s not for everyone. VC funding is the most expensive source of capital: equity is traded for cash. And at later stages, when the business is significantly re-risked, that math does not always add up in the founders’ favour.

This is especially true with capital-intensive deep tech companies, for which hardware, infrastructure, heavy industry, and manufacturing upfront capital investments are generally required.

Also Read: How to boost your pitch deck engagement with investors in 2023

Therefore, looking outside venture capital and toward the full stack of deep tech financing options is critical for science entrepreneurs, both at early and growth stages. There are different kinds of capital for different kinds of startups, and the kind of capital founders end up choosing will likely inform the business strategy — if not entirely direct how the business is run.

The cost of capital will ultimately determine the ability of a company to scale, and in deep tech specifically, capital tends to have an outsized influence earlier in the journey through growth. The capital brought on board should either be (A) cheap and/or (B) value add — most of the founders’ challenge is to figure out whether (A) or (B) are true across stages, structures, and multiple possible strategic paths.

When science entrepreneurs start working on an idea but need more clarity about the product, the commercial strategy, or the market, financing can take time and effort. Often, innovative technologies without a clear path to revenue languish due to a lack of initial funding to prove a concept.

Non-dilutive, project-based — i.e., venture debt, commercial debt, project finance — funding is typically unavailable at very early stages due to a lack of track record. It is also limited in scale and often restrictive in scope. Dilutive funding at this stage tends to be more open-ended but at a much higher cost if the idea proves viable.

The financing options available at early-stage can be boiled down to:

Philanthropic foundations, private grants, and prizes (non-dilutive)

Project-based grants or competitions offering prizes to focus research on a specific area: typically tied to pilots or milestones. This can range from no-strings-attached cash to co-branding (e.g., Omydiar Network, Gates Foundation, ClimateWorks Foundation, Minderoo Foundation, etc.).

Government grants (non-dilutive)

Public capital to support specific technologies and research activities. An empty caveat around government funding is that the cycles can be long, and the certainty expected of a proposal doesn’t always translate into the uncertainty founders have to cross to product-market-fit. Grants also tend to come with excessive reporting requirements after the grant is landed.

Crowd-funding (mostly non-dilutive)

Product-focused and outreach-based financing or capital raise hosted on a technology platform that enables access to a larger pool of potential backers who do not need to be accredited investors (e.g., Kickstarter, Fundable, Crowdfunder, etc.).

Angel investors/syndicates (dilutive)

High-net-worth individuals and founders often pool together into SPVs (group one-off deals), which are typically very network-based, low on diligence, and thesis/category driven (e.g., Green Angel Syndicate, Cambridge Angels, etc.).

Also Read: Pure ideas with no executions to prove do not attract savvy investors: Shao-Ning Huang of AngelCentral

Accelerators (mostly dilutive)

Programs offering funding and resources such as strategic partnerships, advisors, and workshops to help founders build and iterate on their thesis. Programs run the gamut from generalist accelerators like YC to frontier tech ones (e.g. Carbon13, Breakthrough Energy Fellows Program, Creative Destruction Lab, etc.).

Catalytic capital (dilutive)

Funds bringing investment rigour and process to deal with a bias toward frontier tech potential over financial returns (e.g., Breakthrough Energy Ventures, OGCI Climate Investments, etc.).

Rolling funds (dilutive)

Investment vehicles are structured like venture funds (LPs front capital so GPs can do multiple blind deals) but raised on a rolling quarterly basis, minimising the hurdle to fund launch. Typically thematically or community-focused, with similar terms to VC deals albeit mostly following and unpriced (e.g., SAFE notes)(e.g., Climate Capital, Prithvi Ventures, Footprint Coalition Ventures, etc.).

Micro-VCs (dilutive)

A handful of micro-VCs (venture funds that are < US$15–20M) increasingly specialise in niche areas and embrace frontier tech at the pre-seed stage. These specialised capital pools can be tremendously helpful to their portfolio companies in ways that strict financial backers can’t.

Specialisation helps micro-VCs get into competitive deals thanks to their expertise instead of their check size, and the provided support drives science founders to find their product-market fit faster (e.g., Creative Ventures, Embark Ventures, Streamlined Ventures, etc.).

Most science founders naturally focus on (1) and (2) over the first 12 to 24 months and progressively embrace (4) and (5) pushed by their larger community — i.e., the university, a partnering incubator or the first business advisors.

A good track record of non-dilutive funding is broadly seen as a good indicator of the relevance of new technologies to strategic business needs and signals technical competence to investors. Similarly, science-focused operating partners like specialised incubators, accelerators, or venture studios can benefit the founders in networking and building a brand.

The move to (6), (7), and (8) is more difficult for first-time founders. Pedagogy, try-and-learn strategies, outreach, and trust-building generally help them cross the Rubicon.

Capital is a positive feedback loop. The more deep tech startups will grow and succeed, the more innovative financial products will emerge to support their emergence and growth.

Deep tech entrepreneurs must be creative in how they approach their financing because navigating the rules and roles of money will help them and help carve a path for others.

Many science entrepreneurs describe a funding journey similar to a game of Russian nesting dolls to associate various sources of capital: whether from capital abundance, regulation, or market shifts, approaches relevant one day may not be the following.

As the deep tech ecosystem matures worldwide, so will the financing options available to pursue different business opportunities and paths to liquidity.

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At e27, we’re dedicated to fostering innovation by providing a platform where industry leaders can share their unique insights and expertise. Our Contributor Programme is an opportunity for passionate contributors to engage in meaningful conversations about entrepreneurship, technology, and innovation.

Join us for this week’s startup discussions, where we’ll dive into the latest trends, share insights, and explore innovative strategies to drive success in the entrepreneurial world.

Rise of generative AI in search: Exploring opportunities for APAC brands

Considering APAC’s high rate of mobile adoption, it is also worth considering how you can optimise your strategies to be mobile-first. Region-specific nuances and search best practices will be key to setting up for success in the new era of generative search.

Managing Director at NP Digital Singapore, Manuel Denoual’s article explores the impact of generative AI on the search industry, particularly in the context of digital marketing.

Generative AI’s ability to converse with users and be trained on the fly has the potential to fundamentally change the way people use and interact with search engines. Brands are already utilising search engine optimisation (SEO) and search engine marketing (SEM) to generate traffic and drive conversions.

The integration of generative AI with search will create new opportunities for both organic and paid search. In the APAC region, which is leading in internet penetration and mobile adoption, local search engines like Baidu and Naver are already integrating AI and offering unique opportunities for brands.

Singapore’s food services in 2023: Trends, challenges & opportunities

Even in pre-COVID-19 times, the Singapore food services industry was already contending with changes in consumer behaviour regarding preferences, taste, packaging, technological advancements, and regulations.

Engagement Executive from IndSights Research, Syuhada Subuki’s article explores the thriving food services industry in Singapore, which contributed US$5.26 billion to the GDP in 2022 and is expected to generate US$13.5 billion in 2023. Despite its growth potential, businesses face challenges such as evolving consumer preferences and the need for digital transformation.

Strategies for success include adopting robots and machines in kitchens, using ordering kiosks, and embracing eco-friendly packaging. The Singaporean government supports the industry’s digitalisation through initiatives like the Hawkers Go Digital Programme, Energy Efficiency Grant, and Productivity Solutions Grant.

Funding deeptech: Balancing potential and complexity in the search for capital

Deep tech entrepreneurs must be creative in how they approach their financing because navigating the rules and roles of money will help them and help carve a path for others.

Director at New Ventures, Pierrick Bouffaron’s article discusses the funding challenges faced by deep tech startups, which work on transformative technologies like biotech and quantum computing. Despite their potential, these startups often struggle to secure traditional VC funding due to high costs and uncertainties.

Also Read: Contributor spotlight: A roundup of this week’s startup discussions

The article suggests that deep tech entrepreneurs explore alternative financing options, including philanthropic grants, government grants, crowdfunding, and specialised investors. As the deep tech ecosystem matures, more diverse financing options are expected to become available.

Seizing opportunities: Accelerators as a strategic choice in bear markets

The relationships formed within the accelerator ecosystem, including connections with mentors, investors, and fellow entrepreneurs, continue to yield dividends long after the program concludes. In this way, accelerators offer startups not just a lifeline in challenging times but a path towards a thriving future.

CEO and Head of School at NewCampus, Will Fan’s article highlights the importance of accelerators for startups during bear markets, where traditional funding becomes scarce. Accelerators offer startups mentorship, resources, and funding in exchange for equity, providing a structured support system that helps them navigate economic uncertainty.

These programs foster innovation and adaptation by encouraging startups to explore new solutions and business models. Accelerators also mitigate risks and build resilience by guiding startups through strategic decision-making and providing access to a broad network of industry experts, investors, and potential partners.

By instilling a culture of innovation and forming lasting relationships within the accelerator ecosystem, startups are better equipped for long-term success and sustainable growth even in challenging market conditions.

Taking a six-week mental break: A personal journey

I’m recharged, rebooted, enhanced with better digital skills (more adaptable to work on the go), even more resilient, thankful for the solo time, and for helping me bring out a better version of myself!

Director at APRW, Anu Gupta, shares her experience of taking a much-needed break from work to recharge and reflect. She chose to spend five weeks alone in a small, slow-paced town while dropping off her elder daughter for an overseas summer program. The different time zone, setting working hours with the team, and focusing on their well-being allowed them to prioritise rest and avoid burnout.

During this time, she travelled light, learned to adapt to a new culture, and embraced the charm of small-town life. The trip enabled her to recharge, improve their digital skills, and become more resilient, ultimately leading to a better version of themselves.

The future of food: Tech-enabled, hyper-personalised, and sustainable

Tech will be a key enabler to achieving such food security, wellness, and sustainability goals across Asia and worldwide. Investment and innovation will advance and harness tech to shape the future of food, transforming options for food production, accessing nutrition, and how food consumption is shaped and experienced.

Founder of Cornucopia FutureScapes, Luke Tay’s article discusses how technology is transforming the food industry, with a focus on Asia-Pacific’s alternative protein startups and Singapore’s innovation in sustainable and healthy food systems. AI-driven personalised diets are expected to revolutionise food consumption, with the Personalised Nutrition industry potentially reaching SG$86.5 billion by 2040.

Climate-smart agriculture and diversified plant and animal species aim to combat climate pressures, while food delivery services are evolving to offer AI-driven personalised and sustainable options. The article emphasises the importance of collaboration between industry, governments, and consumers in creating sustainable food systems and making informed choices for personal and planetary wellness.

Balancing AI and human ingenuity: A guide to keeping your brain sharp

In an era where artificial intelligence tools like ChatGPT provide instant answers, there’s growing concern that reliance on these platforms might dampen our cognitive abilities.

Creator and Host of Whats Your Story Slam, Anna Ong’s article explores the impact of AI tools like ChatGPT on cognitive abilities. She suggests balancing AI use with activities that maintain brain fitness, such as puzzles and learning new languages.

Strategies for preserving human intellect while using AI include setting boundaries for AI use, engaging in mental exercises, applying learned information, incorporating physical exercise, and partnering with AI for collaborative thinking. The article emphasises that the future should integrate AI and human intelligence for understanding, innovation, and personal growth.

Levelling the playing field: How AI can transform SME hiring

Within the recruitment industry, the reticence to adopt AI solutions has to do with risks of bias and redundancy of recruitment roles. The answer to both issues is the same: regardless of what solutions SMEs choose, recruiters won’t be replaced by AI.

Managing Director (Asia) at Employment Hero, Kevin Fitzgerald’s article discusses the challenges faced by SMEs in recruitment, including talent shortages and competition with larger firms for candidates. It suggests that AI solutions can help SMEs by streamlining the hiring process, reducing bias, and saving time and money.

Also Read: Voices of innovation: Showcasing e27’s top contributors of the week

The article addresses criticisms of AI in recruitment, emphasising that AI will not replace recruiters but will enable them to focus on higher-value tasks and scrutinise bias. AI-based solutions can address SMEs’ recruitment challenges, leading to improved talent attraction and retention.

How to manage multi-cloud complexity: A strategic guide

Multi-cloud is about accessing an ever-expanding set of innovations across clouds and acknowledging that you need the capabilities of the entire ecosystem to deliver modern IT.

Vice President & Managing Director at Dell Technologies Singapore, Andy Sim’s article highlights the growing complexity in the multi-cloud landscape, with organisations, including the Singapore government, investing heavily in various cloud environments. However, the proliferation of specialised clouds can lead to silos and hinder data and app mobility.

The article argues against a monolithic cloud approach, which limits innovation and leads to vendor lock-in. Instead, it advocates for an open ecosystem that allows interoperability and integration across different cloud solutions and services. This approach is seen as crucial for maximising the benefits of cloud computing, especially in areas like AI and automation.

Flexibility is key: How to succeed in an ever-changing startup world

As a founder, you must stay resilient, both mentally and physically. Taking care of yourself will enable you to make rational decisions and lead your team effectively.

CEO and Founder of Credolab, Peter Barcak’s article discusses his experiences and insights in navigating the ever-changing business landscape. Despite a 90 per cent drop in revenue during the pandemic, Credolab managed to secure Series A funding from GBG, an investor who saw their long-term value.

The company pivoted to new business models, introducing modules for anti-fraud insights, account takeover, and data enrichment, leading to a positive impact on revenue. The CEO’s advice to fellow entrepreneurs includes embracing adaptability, hiring talented individuals, and remaining perseverant even in the face of challenges.

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