Wayra Germany presented its new startup support model on Thursday evening. With this redesign, Telefónica's venture unit aims to provide mature startups and young technology companies with a boost in innovation and growth.
To achieve this, Wayra relies on a “venture client” model, which is also practiced in this form by the Munich heavyweight BMW within the framework of the Startup GarageThe central element: Startups should become Telefónica customers and suppliers to one of the world's largest telecommunications companies. Through direct project work with Telefónica's business units, they can improve their operations and benefit from a global network. In addition, Wayra provides financial support, operational resources, and coaching, provides office space for the startups, and organizes networking events within the startup ecosystem and the company.
Wayra targets young, growing technology companies with a focus on the Internet of Things (IoT), data analytics, cybersecurity, and artificial intelligence (AI). Christian Lindener, Managing Director of Wayra Germany since February 2017 and initiator of the new model, announced the relaunch on Thursday evening at Wayra's "Big Bang" event presented.
Startup scene in rapid change — Wayra is changing with
Wayra launched its accelerator program in Germany in 2012 and has since successfully developed around 40 startups.
“Wayra was the international pioneer in corporate entrepreneurship,”
says Christian Lindener.
"Our successes show that our approach was the right one. But that doesn't mean we should continue exactly as we started five years ago. When supporting innovation, we must focus on the needs of a rapidly evolving startup and technology scene. And as a venture unit within a corporation, we must also clarify where we can best help. Our new venture client model starts right here."
Why the Venture Client Model
The venture capital landscape is particularly dynamic in Germany. There are now almost 100 corporate accelerators, incubators, and labs operating in the country. The investor scene is highly diverse. Venture capital deployment has increased dramatically in recent years and is primarily used in a risk-averse manner. The volume increased from around €570 million in 2012 to more than €950 million in 2016 (source: German Private Equity and Venture Capital Association / BVK). Furthermore, Germany has a higher proportion of high-tech startups and young technology companies than many other industrialized countries. Wayra Germany's decision to adopt a venture client model was made against this backdrop.
“Implementing a technology project for a world-leading telecommunications company, i.e. subjecting one’s own products and developments to a tough reality check, can mean a real growth boost and leap in sales for startups,”
explains Lindener.
“At the same time, the customer-supplier relationship clearly defines mutual expectations and reduces the risk of disappointment – on both sides.”
Wayra and Telefónica's business units not only support the implementation of the technology project, but also assist in the marketing of products, connect the young companies with decision-makers from other corporate divisions, and establish contact with their distribution network and commercialization channels.
From bootcamp to participation
Wayra aims to identify and support up to ten startups annually. Startups will benefit from the venture client model in multiple ways. They will initially receive four months of intensive support. The one-month pre-acceleration phase is followed by a three-month phase in which a technology project is implemented for Telefónica. Intensive coaching sessions (boot camps) with experienced managers and founders take place one week a month. Continuous exchange takes place with Wayra's and Telefónica's global network of mentors, founders, and technology and industry experts.
In the initial phase, Wayra does not invest in the respective companies (“zero equity” approach): The startup receives €25,000 for the implementation of the technology project. If the project is successful, there is the option of follow-on financing, which Wayra can use to with up to 350,000 euros in the company.
Wayra, the innovation scout
For Telefónica, Wayra acts as a global technology and innovation scout: The venture unit identifies companies with innovative pioneering technologies that fit the telecommunications group's growth strategy and subjects them to a thorough review.
"We determine whether these companies provide added value and whether there is a need for their respective solutions within the Group. If so, we invite them to apply,"
says Christian Lindener, who has met and evaluated several thousand young companies over the course of his professional career. Lindener wants to strengthen Wayra's network with other corporations and corporate venture units. His vision is to establish Wayra as a platform where startups, corporations, and technology experts can exchange ideas so that technological innovations can prevail and new business models emerge.
