THE TAKEOFF OF EMERGING COMPANIES IN A COMPETITIVE WORLD
UNIVERSE
‘STARTUP’ 01
‘Startups’: Europe request entry
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04
Twenty startups to watch in 2016
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FINTECH SERIES BY
Women in ‘Startups’?
INFOGRAPHIC
Twenty startups to watch in 2016
innovation edge
03
Universities fight to attract future startup
01
‘Startups’: Europe requests entry Thirty European technological companies are worth 30 billion euros. The Old Continent is breaking barriers in digital transformation.
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Silicon Valley seems to be on another planet when we talk about startups, although the differences between Europe and America are becoming less, according to a study by the consultancy company Roland Berger. For the last few years, the European ecosystem has favored the growth of startups and people no longer have to dream of having an office in California to become a technological giant.
are expected to keep growing in 2016, and definitively break the four myths of the European startup scenario.
According to the study Can European start-ups crack the code? , in the last eight years, the number of technological companies in the Old Continent has grown by 400%. In Q1 2015, startups brought in 6.9 billion dollars, 86% more than the previous year. They
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Myth 1: Europe isn't attractive for entrepreneurs. The study emphasizes that this isn't true and highlights that in Europe there are a large number of "ecosystems", each with special features and growth mechanisms. It points out that London is the place that attracts the most startups, which tend to develop in urban and dynamic surroundings. Also Berlin, "poor and sexy", which offers a hugely creative environment;: its streets bring together different languages and attract different entrepreneurs from around the world. Paris is at the other end of the scale, at least 12,000 startups are based in the French capital, feeding off a special talent, especially in engineering. We mustn't forget
other attractive cities such as Amsterdam, Barcelona, Dublin, Copenhagen and Helsinki. Myth 2: Europe doesn't have a capital. A point that is true to a certain extent, but which is changing, according to the report. Access to funding, or the lack of it, has always been one of the big competitive complexes for European startups . 2 years ago, European startups managed to raise 8 million dollars in funding from US sponsors and just 3 million from European investment. A trend that's gradually changing. The number of European companies that have managed to get "seed capital" has grown by 600% since
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2009. Looking beyond the numbers, there is also a series of structural changes in the European financial environment. In first place, it's becoming increasingly less expensive to set up a company since many of the technical and infrastructure costs have reduced thanks to the cloud, which offers open and free software. Secondly, the report highlights that European startups are on the way to offshore funding, in both the United States and in China.
Myth 3: Talent shuns Europe. According to the study the opposite occurs, and although it states that the European scenario has been more difficult to access and has put up barriers for India or Eastern Europe (due to the language, English language and some restrictive labor laws), the crisis that has devastated the old continent has achieved something that politics didn't. It created the urgent need for change in the economic model and it showed people that working for a large firm isn't
synonymous with security. The crisis made the ecosystem mature rapidly, offering new opportunities for young talent. To attract the most talented, able and committed people there must be a creative ecosystem that leads the local scenario. And Europe is trying to facilitate the mobility of its workers to drive digital disciplines.
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Myth 4: The European business environment is not approachable for startups. This has changed a lot in recent years. The study emphasizes that there is not a unique European digital market, but there is a decent digital infrastructure in each of the independent digital markets. The penetration of hubs is good and the conditions in the offline world has enabled Europe to have a series of advantages -a large number of market leaders in variable, complex and technical fields, in addition to a strength
in automobiles and engineering. European startups can make traditional companies earn money in the digital world. One of the main reasons the Europeans would do well adopting the strategies of a new market -a blue ocean-: create its own opportunities beyond the American model. Europe must take advantage of the low costs compared to the United States, to create a startup. For example, the average annual salary for digital workers in Silicon Valley
is around 195,000 dollars, reaching 291,000. In Europe, the highest levels reach 127,000 dollars.
Having broken the four myths that followed European startups, the Old Continent must take advantage of its political leadership, values and traditional experience to keep driving the digital transformation in 2016.
02
Women in startups? Several groups aim to change in 2016 the current landscape of technology companies dominated mostly by men.
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“Welcome to the misogynist world of startups”; Why are there so few women leading startups?; What Silicon Valley thinks about women; Women and startups: an impossible combination? These are some of the headlines in the media highlighting the little presence of women in technology companies. A landscape that groups like Women Hackers Action Tank (WHAT) aim to change with initiatives fighting for women's role in technology. The figures show their very limited presence. To give an example, in the United States in the '80s almost 40% of computer engineering graduates from universities were women. Today they only represent 14%. Society now sees women as "not belonging
to the technology environment". In Europe, specifically in Paris, the revolutionary programming school École 42- with around 1,700 students- only has 10% of women. Annie Kahn, the Le Monde journalist and member of Women Hackers Action Tank (What), stressed in an article published in the French newspaper the need to “reverse this trend to break this glass ceiling that, paradoxically, technology has been unable to break”.
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Digital is associated with men, although last year the presence of women grew according to the Global Startup Ecosystem Ranking 2015. Although it points out that the lack of gender equality is widespread in the world of
startups, the trend for entrepreneur women is changing, since the number of women setting up startups has grown by 80% in recent years. In 2012, 10% of startups had been set up by women, compared with the global
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average of 18% among the Top 20 in 2015. In the United States, Chicago, with 30% of founding women, has the largest percentage.
The figures change and it its clear that Silicon Valley does not want a repeat of the trial for machismo held last February when Ellen Pao filed a lawsuit against the venture capital firm Kleiner Perkins Caufield & Byers, charging them with gender discrimination. A trial that even though it ended up becoming a soap opera -and ruled against the worker- seemed to make clear that discrimination on grounds of sex in Silicon Valley is a real problem in the country of opportunities.
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03 Universities fight to attract future startup US academic institutions are changing their curriculum and are launching themselves into an innovation race to meet students' entrepreneurial ambitions.
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The original charter of Houston's Rice University, which is among the 30 top universities in the United States, written in 1891, states that the institute's principles are based on promoting literature, science and the arts. According to the New York Times, Rice now seems to be interested in engaging the next generations of the Facebook Founder.
teach them how to turn their ideas into entrepreneurial projects. In 1985, US university campuses only offered around 250 business courses, according to a report by the Ewing Marion Kauffman Foundation (which funds education and business training). By 2013, more than 400,000 students received this type of course.
It is not the only university that has launched itself into the innovation race. And they have not got it easy. Around 10 years ago it was enough to offer a few business courses, workshops and classes. But students, inspired by the success of billionaires in Silicon Valley, expect universities to
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Rice, in particular, offers academic courses in business strategy and funding, extracurricular workshops on startups and a summer program for studies who wish to set up a business. In August, the Texan university announced a multi-million "business initiative" to develop more courses and programs in this field. The university managers also say that they
hope to set up a business center that provides support to the students' projects Elite institutions have embarked on a race toward innovation. Harvard opened an Innovation Lab in 2011 that has helped more than 75 new companies. Last year, New York University set up a campus-laboratory for entrepreneurs, and this year the Northwestern University
opened the Garage, a center for startups for students. “Students of today have a thirst to make an impact and we need to respond to that�, Gordon Jones, Dean of the new Innovation and Design College at Boise State University, Idaho, and former manager of the Harvard Innovation Lab, explained to the NYT.
Skills However, some academics are skeptical about this entrepreneurial spirit frenzy and claim that startup programs can lack rigor and values. Some professors even believe that some universities are simply repeating the “innovation and split” models of Silicon Valley, seeking out potential clients and possible investors, instead of encouraging students to tackle more complex problems. Because it is a question of developing rich business ecosystems, many institutions are following the script written years ago by Stanford and the MIT, which consists of academic courses, practical experience and a large network of former
students. Princeton also offers a variety of business courses. The possibility of creating the new Instagram or Snapchat is appealing to students. However, in a complicated labor market, in which young people think that they are going to switch jobs in a few years, some students sign up for startup training in the hope that they will acquire selfemployment skills.
Some of this spirit was evident at Rice in October. In a design laboratory in the engineering department, the students involved in the health technologies program were working on developing products for real clients -Malawi hospitals- like low-cost medical devices. On the other side of
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campus a tour by startups was being held, bringing executives from young companies together with students.
To back their programs, universities are collecting money and looking for mentors among their former studies who have been successful and among local business leaders. The New York University Laboratory was funded by Mark Lesbie, founder and executive director of Veritas Software, along with his wife Debra.
Chairman of the Philosophy Department at the John Jay College of Criminal Justice at New York University. “Quite frankly, that is not educating the people”. And at least a couple of business professors say that some universities are not ensuring that students learn the basics of starting, running and maintaining a business.
However, the workshops at some university campuses can clash with the traditional premise of schools who aim to educate critical thinkers. “True innovation is based on knowledge and long-lasting concern and interest, not only on “I thought of something that had not occurred to anyone before”, says Jonathan Jacobs,
We will have to wait a few years to see whether the upcoming generations continue to dream about creating startups and whether the changes to educational models help them to do so.
FINTECH SERIES · DECEMBER 2015 · www.centrodeinnovacionbbva.com/en
04
Twenty startups to watch in 2016 Forbes selects the companies most likely to make a mark this year.
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Inverse Founded in 2015 and based in the Bay Area, Inverse is a digital media source that covers latest news, TV, movies, music, digital culture, science and innovation, all aimed at a male audience. With around 20 employees its investors include Greycroft Partners, Crosslink Capital and Rothenberg Ventures. Mobcrush Founded in 2014, Mobcrush is a community and platform for mobile video games. It aims to boost the global user community by providing a simple solution that can be accessed via mobile devices.
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The company has raised 15 million dollars from venture capitalists Kleiner Perkins, CrunchFund and Lowercase Capital. Product Hunt Product Hunt curates the best new products each and every day. It is one of the most influential platforms around. Figures from the tech sector and venture capitalists use the platform to seek new startups. It is the go-to site for product launch announcements. Investors include SV Angel, Naval Ravikant and Greylock Partners.
Patreon Founded in 2013 thanks to the investment of around 17 million dollars by Alexis Ohanian and Sam Altman, Patreon is a platform that allows content creators such as artists, YouTubers, photographers, musicians,
authors, writers and others to create websites for their work and get support from their fans. The community currently has around 2,000 creators. Based in the Bay Area, the company employs more than 40 people.
Carousell Carousell makes it easy to sell those items that you no longer use or need. Selling is easy via the "Snap" list, while buyers can get what they like by chatting with sellers via the application. There are currently some 26 million products on sale. The Singapore-based company's appeal is on the rise. Investors include 500 Startups, Golden Gate Ventures and Sequoia Capital. Doormint Doormint is a mobile platform for on-demand basic consumer services in the home. Investors in the startup include Helion Venture Partners, Kalaari Capital and Powai Lake Ventures.
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Founded in Mumbai, it has raised some 7 million dollars. Belong Belong scans social networks, the internet and public data sources to find potential candidates for job vacancies. Based in Bangalore, the company has raised money from investors such as Matrix
Partners and Blume Ventures. Founded in 2014 by Saiteja Veera, Rishabh Kaul, Vijay Sharma and Sudheendra Chilappagari, the company employs 60 people and is still growing.
SendinBlue SendinBlue allows users to manage contacts, create newsletters and track results. The Paris-based company has raised 2 million dollars from investors such as Caloga. With close to 40 employees, it was set up in 2014 by Armand Thiberge and Kapil Sharma.
Giphy Jace Cooke and Alex Chung founded Giphy in 2013. With its headquarters in New York, Giphy is a GIF search engine. Animated GIFs have been around for decades, but until now there was no good way to browse and discover the best that the internet has to offer. Giphy's vision is not just to help you find GIFs. At present it is only a search engine but soon it will grow into a community; a platform loaded with materials for GIF artists, enthusiasts, bloggers and anyone interested in finding or creating the next big meme. Having raised nearly 23 million dollars, the company's investors include RRE Ventures,
Lightspeed Venture Partners, Lere Hippeau Ventures and General Catalyst Partners. Maple Maple hopes to revolutionize the home delivery food market in the city of New York. With around 50 employees, the company was set up by Caleb Merkl and Akshay Navle in 2014. Since then it has raised 25 million dollars from Primary Venture Partners, Thrive Capital, Andy Dunn and others. BitGold BitGold aims to make gold accessible and secure for digital payments. As one of the star newcomers in Toronto, the firm has raised 30 million dollars from investors
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such as PowerOne Capital and Soros Brothers Investments. It was founded in 2014 by Josh Crumb and Roy Sebag. Play Buzz Play Buzz was founded in Tel Aviv in 2012. It allows users to play with and create web content via custom surveys, lists and questionnaires, and to include them in a website or simply share them with friends. With some 18 employees the firm has raised 19 million dollars in investment from Carmel Ventures, Saban Capital Group, FirstTime Ventures, 83North and others.
Leesa Sleep Leesa Sleep is ready to do battle with established firms operating in its space. Leesa is an online luxury mattress business that breaks the traditional model by providing direct deliveries of very comfortable mattresses, while also running an industryleading social impact program. It has raised 9 million dollars from investors such as TitleCard Capital. The company was founded in 2014 by David Wolfe and Jamie Diamonstein.
Voonik Voonik is a personal style platform that supports shopping for clothes and accessories by combining multiple stores on a single platform and allowing users to view all products at a glance. The company has raised investment of 5 million dollars from Sequoia Capital. Based in Bangalore, the company currently employs more than 80 people.
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Zoomo Zoomo is a peer-to-peer mobile market for used car sales. From its headquarters in Bangalore, founders Arnav Kumar and Himangshu Hazarika decided to launch the business in 2014 with the support of SAIF Partners. Since then it has raised 6 million dollars and has a workforce of more than 100.
Opinio Opinio is another Bangalore startup on the list. It provides delivery services for food and other products, thus connecting users with restaurants, stores, laundries and pharmacies. With more than 80 employees and 8 million dollars of investment, its backers include Accel Partners, Sands Capital Ventures and Delhivery. Alodokter The Alodokter platform contains comprehensible information on medicine, illnesses, health and exercise. Registered users may also request medical opinions via the website. Founded in 2014 by Nathanael Faibis, it has raised early financing from 500 Startups, Jungle Ventures,
Fenox Venture Capital, Golden Gate Ventures and Lim Der Shing. Save Save is a promising startup with its headquarters in Paris. It offers smartphone repair services with transparent prices, either dropping your phone at one of its shops or sending it by courier. Founded by Damien Morin, the company has raised 17 million dollars from IDInvest Partners and 360 Capital Partners.
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Droom Droom is the first mobile market in India for new and used cars. With 16 million dollars invested by Beenos and Lightbox Ventures, the company employs more than 50 people after less than two years in business. Scandeep Aggarwal had the original idea in 2014 and has guided the startup's success since then.
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Parcelled Parcelled is an on-demand online courier that has revolutionized the world of logistics, radically changing the way we send items. Established in Bangalore, the company has raised 5 million dollars from Delhivery and Tracxn Labs. At present it employs a staff of 80, overseen by founder Xitij Kothi.
05/INFOGRAPHIC ‘Startups’ european in 2015 Thirty European technology companies are worth 30 billion euros. The Old Continent is breaking barriers in digital transformation. Share on Pinterest
FINTECH SERIES · DECEMBER 2015 · www.centrodeinnovacionbbva.com/en
4 5 6 7
Tel Aviv London Chicago
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Montreal
Amsterdam
Vancouver
Toronto
Sidney
Bangalore
Austin
Moscow
S茫o Paulo
Paris
Singapore
Berlin
Seattle
3
Boston
1 2
Los Angeles
New York City
Silicon Valley
TOP 20 GLOBALLY
8 9 10 11 12 13 14 15 16 17 18 19 20
OUTPUT VOLUME OF THE TOP 20 Silicon Valley London Los Angeles Tel Aviv BerlIn Boston Chicago New York City Amsterdam Seattle Paris Austin Singapore Vancouver Montreal S茫o Paulo Toronto Bangalore Moscow Sidney FINTECH SERIES 路 DECEMBER 2015 路 www.centrodeinnovacionbbva.com/en
47,3% 10,2% 6,6% 6,5% 6,1% 5,7% 4,5% 3,6% 2,5% 2,1% 1,2% 1,2% 0,8% 0,5% 0,3% 0,3% 0,2% 0,2% 0,1% 0,1%
‘STARTUPS’ EUROPEAN FIGURES
110 dollars
MILLIONS of accumulated value of unicorns in Europe.
86% more than in 2014.
6,9 dollars
MILLIONS of increase in the second half of 2015.
FINTECH SERIES · DECEMBER 2015 · www.centrodeinnovacionbbva.com/en
400%
faster European incubation in the startup ecosystem in 2015 than in 2007.
A MATTER OF MONEY While French startups attract significantly more venture capital, in Germany, Austria and Switzerland businesses achieve a higher increase in volume.
Number of startups
Startup value
France
159
UK
154
Germany *
81
Scandinavia
47
(in millions of dollars) UK
2.5 millions
Germany*
1.8 millions France
1 million Scandinavia
1 million * Germany, Austriaand Switzerland FINTECH SERIES 路 DECEMBER 2015 路 www.centrodeinnovacionbbva.com/en
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