THIS week, ST Engineering launched Innosparks – an incubator for healthcare, workplace safety and security startups – in an event officiated by Minister for Trade and Industry (Industry) S Iswaran. The Singapore-listed engineering group said that it would commit up to S$500,000 to each startup to get their idea to market within 18 months.
With Innosparks, ST Engineering joins a growing crowd of large corporates that have in recent years launched corporate accelerators and incubators, or carved out corporate venture capital funds, to nurture startups that can boost in-house innovation or even disrupt their industry.
As further proof of the corporate-startup trend, Shell last week unveiled its Singapore-based corporate accelerator, Shell #IdeaRefinery, while GIC partnered global entrepreneurship network, Startup Weekend, to hold one of South-east Asia’s largest hackathons in Singapore.
Once again, the spotlight is on corporate startup programmes. On at least two occasions in the last two years, this column has pointed to a “wayang on disruption” – suggesting that some of these corporates roll out such initiatives mainly for PR (public relations) purposes or to generate shareholder interest.
The criticism is increasingly valid today. More recently, more corporate accelerators seemed to be launched than actual startups – and while the roll-outs of corporate accelerators have lifted the profiles of these corporates (some are now praised as industry disruptors themselves), they haven’t done the same for the startups that are part of the accelerators.
The startups have remained relatively unknown and unrecognised. It’s a different story for the corporates – they have gained publicity from these corporate-startup programmes (the launches of which often come across as promotional events that usually involve a minister), and also credibility from seemingly having grasped the need for innovation and responding to it.
If anything, the startups seem to be cogs in these corporates’ wheels. While they do get their few minutes of fame at Demo Day – during which they get to pitch their product to a typically-closed-door audience of investors and corporate executives – little is usually heard about their follow-on developments, such as funding or user base milestones.
Without knowing what happens next for the startups and the corporates alike, many observers have come to question the value of corporate accelerators, and more broadly, corporate-startup programmes.
A simple way to resolve this is to give more attention to the startups. And the onus is on the corporates to actively and genuinely promote their portfolio startups – with information that could range from what they do and their accomplishments to their relevance to the business and how the corporate has supported them in their startup journeys.
For instance, UOB announced in a recent update that Turnkey Lender (a startup from cycle one of its corporate accelerator programme, The FinLab) has expanded into Indonesia while participating in the programme. The cloud-based loan management startup has also snagged US$2 million in funding from Temasek’s Vertex Ventures to expand across South-east Asia.
In the same update, UOB said that The FinLab has enabled portfolio startup PayKey to partner the bank to create UOB MyKey, a solution that allows consumers to pay and to be paid securely through social messaging apps. This is the Israel-based fintech startup’s first business deal in South-east Asia, said UOB.
Such updates are constructive and meaningful, as they showcase the progress made by the startups that are part of the corporate-startup programme, and the synergies between the startups and the corporate. They also demonstrate the importance placed by the corporate on such programmes, and therefore help to attract committed, innovative startups.
When it comes to corporate-startup programmes, it pays to focus on the startups more than the corporates’ own PR campaigns.