For those who are still obsessed about the Silicon Valley buzz, it might be quite unexpected to learn that emerging markets are creating a very positive vibe in the startup world today. Very few people think about innovation and business development when they hear about the countries of the CEE, MENA, LATAM regions, Africa and Asia, which is actually a mistake. Seedstars World, an exclusive startup competition, gathering startups from 55 countries in emerging markets and organized by enthusiastic and talented people, is trying hard to open the rich potential of the higher mentioned areas to the whole world and help the local entrepreneurs promote their innovative products.
We had a great honor to talk to Seedstars World CEO Alisee de Tonnac, who is now managing the company, quartered in Geneva, and bringing the whole international startup community to a new level.
What is a startup in your understanding?
For me, a startup is a business that has just been set up, so still very early stage (even though, some companies are still considered startups after 5 years) and that has a potential to scale at an exponential rate. We source for scalable startups, so we do not consider young enterprises that will become small and medium businesses. The majority of the companies we source are linked to technology and so we are looking at their scalability.
Which startups in the CEE region have impressed you most recently?
All are impressive! We have Evreka from Istanbul that is a real-time logistics solutions for waste management companies that use IoT and M2M technologies. We also have Ecoisme, from Kiev that is a home energy monitoring system that detects every home appliance in your house, based on its signature within the grid. Or, Texel, from Russia, that is building the first engaging 3D scanner. And all of them, are driven and amazing entrepreneurs.
Could you please share your views on the current industrial trends in terms of startup development and investment activity? Like, what is trendy in 2016?
Within the competition Seedstars World we focus on seed stage companies and our criteria is less than 2 years, less than half a million in capital investment, with an MVP and regional and global reach. So keeping that into consideration, the majority of companies pitching at our event are more ICT-based. We have hardware companies and they usually come from the CEE region. We have some cleantech, augmented reality, but the majority is ICT. Indeed, it cancels out other spaces such as nanotech, biotech or life sciences, which usually requires more funds or more time. And we can really find great tech companies in all corners thanks to the global democratisation of launching a business.
In Latin America, we see a lot of gaming companies. No wonder, as the biggest gamers are in Brazil.
When you think of Africa, we see a lot of companies in the sectors of fintech and insurtech services are booming. There are great success stories in this field and strong government involvement to get to a cashless economy. The famous example is M-Pesa in Kenya: the reality is 40% of Kenya’s GDP passes through M-Pesa, it’s absolutely mainstream.
In general, we are gradually witnessing the digitalisation of all industries from banks, insurance, travel, retail to education and healthcare. The beauty of technology and the access to the internet (through mobile phones in the majority when considering EM) is that it gives ACCESS. Access to jobs, education, health, etc to those in remote. We need to remember that still over 4 billion people do not have access to the internet. And for me, that is potentially 4 billion consumers.
Then what is also trendy is augmented reality and Internet of Things, such as telematics. In Asia, everything related to e-commerce and to the whole social network experience is still strong, because our general Facebook, Twitter etc. have strong penetrations in certain regions such as Indonesia and Thailand, but there are also copycats of these social networks which are working very well and monetising even better.
This year Seedstars Summit has introduced two additional award channels for startups involved in travel and space industries. Does it mean that startups in these industries are also gaining power?
According to the World Tourism Organisation, there were more than 1.1 billion people travelling outside of their home country in 2014 alone, which demonstrated the huge potential of this market. As mobile phones and social media networks are increasingly used, the travel industry is changing rapidly and new smaller actors coming from emerging markets among others are gaining ground. In the last few years, the travel industry has seen a rise in the number of startup unicorns, accompanied by massive funding rounds and high profile acquisitions. lastminute.com group, our travel partner, sees this change as an opportunity to bolster innovation and expand internationally by investing in the best travel startups.
Taking this in mind, we are collaborating with lastminute.com group, a very ‘entrepreneurial’ company. Having a top industry leader with us, we feel that we can bring even more value added to the startups, because collaborating with the corporate means potentially accessing their technology, distribution channels, suppliers, potential clients. It’s not just about the funding. So this is really what we want to build, “verticalize” our competition by industries.
And same goes for space, for the first time this year, Seedstars World has partnered with Inmarsat, a global leader in mobile satellite communication and AP-Swiss, the joint initiative of the European Space Agency and the Swiss Space Office to promote the most promising startups in emerging markets active in the space industry or leveraging satellite technologies. Through the Space Prize (where a grant of USD 50K will be awarded to the best space startup), we want to show that space is now open to everyone, and especially to startups. Space technologies can deliver huge benefits to startups, whether they are working directly with space applications, or in sectors such as agriTech or merchandising. However, people need to have access to these technologies and understand how to best integrate them.
How do you usually pick up startups within Seedstars World? Which are the main criteria?
Overall, we have received 3000 applications, listened to 800 pitches and selected the top 50 to the final. At each local pitching event, we indeed have a local jury and follow an evaluation form for all pitches. We work with local jury members, get linked to top regional investors, accelerators, successful entrepreneurs – all the main players, building this ecosystem. With them, we define the winners of each competition. We look at product/service, scalability, market opportunity, the team and the revenue channels. But when we think of seed level investments, it finally comes down to the following issue: will this or these entrepreneurs make the difference, will they manage under pressure, are they passionate enough to go over different obstacles, and are they able to be agile and react quickly to the market and consumers feedbacks. So it really comes down to the question if we really believe in this entrepreneur.
What happens after the Seedstars World Summit? Do you stay in touch with your winners and alumni?
We really become a family. It’s one intense week: we are living together, we are working together like crazy because we are pushing the limits of the startups and the entrepreneurs. We are bringing top-class mentors, advisors, investors from around the world to come and work with us. So it’s a very intense experience where everyone shows up and where we all try to get the best out of the experience. You are mixed up with someone from the Philippines, from Mexico, Pakistan and you realise that even though everything separates you socially, economically when it comes down to entrepreneurship, we all speak the same language. So quite a magical experience I must say.
We always try to be connected in terms of visibility for media, in terms of connecting with mentors, advisors, clients, if we can support in terms of fundraising. And what we want to do for the next edition (the one in 2016) is to organize an accelerator program to help them in the growth stage.
On 3rd of March, the
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