Last week, Callaghan Innovation announced he has established three new accelerator programmes offering early-stage business support to technology entrepreneurs developing products for lucrative global financial, digital and energy markets.
The first, a Fintech Accelerator for eight Kiwi start-ups, will start in February and will be run by Wellington’s Creative HQ, which has run a founder incubator and the lightning Lab accelerator programme with Callaghan Innovation support in the past.
The accelerator will use a tried and tested model developed by TechStars in the United States. The 14-week residential programme is an opportunity for Fintech start-ups to take their idea for a new financial product or service to the global stage and help grow the New Zealand economy.
Here’s Creative HQ’s Stefan Korn on the Kiwi Fintech back-story: “Traditionally, New Zealanders have been innovators in this space. Our early adoption of EFTPOS is an example. Recently, however, we’ve fallen behind. We want to turn that around and create more companies like Xero which has demonstrated that it is possible to develop a billion dollar Fintech company operating out of New Zealand.”
A March 2016 PWC report into global Fintech found that the landscape for financial services was being redrawn as Fintech altered how, when and where financial services and products were provided. Eighty-three percent of financial services companies surveyed believed their business was at risk of disruption from Fintech companies.
The potential is enormous. Global investment in Fintech ventures reached $5.3 billion in the first quarter of 2016, an increase of 67% over the same period last year. In Australia, the Fintech sector is forecast to grow to over $4 billion by 2020, of which $1 billion will be completely new added value to the Australian economy.
And it’s just one sector that stands to grow our collective pie. Digital technology is another rapidly growing and high value global sector with huge potential for New Zealand businesses. Callaghan Innovation has partnered with another of our founder incubators, The Icehouse, to run the FLUX accelerator. The six-month long technology programme offers start-ups funding of between $20,000 and $100,000 as well as access to mentorship and global connections.
FLUX will build on the success of two shorter programmes run by The Icehouse over the last two years. The Icehouse has learnt from earlier programmes and designed a new model. It runs for a longer period and provides a smaller number of companies with more support to help them gain market traction and raise further capital. FLUX is for start-ups with a big vision that they’re committed to achieving. Here’s The Icehouse Director of Acceleration, Mark MacLeod Smith: “Historically we’ve worked with very early stage start-ups. We’re now opening acceleration up to ones that are further advanced. Our mission is to provide the best platform for a start-up to build a product customers will love, and raise further capital to get them on the path to scale.”
But wait – there’s more! A third accelerator programme targeting the energy sector, will be run out of Wellington. This accelerator is specifically designed to make a difference in the energy sector, by engaging the industry to determine the challenges start-ups can be deployed through an accelerator to overcome. Details are still under development, but the process is likely to begin with an energy innovation roadshow in early 2017.
The accelerator programmes complement Callaghan Innovation’s existing early-stage business support, including founder- and technology-led incubators. Later this year we will be running parallel open tenders for accelerator and founder incubator funding that goes live on 1 July 2017. Running these processes in parallel recognises that some providers offer both types of services and creates opportunities for strategic advantages and operational efficiencies.
We have just been able to confirm the extension of the technology incubator pilot with existing providers Astrolab, Powerhouse Ventures and WNT Ventures, thanks to two years’ additional funding following a MBIE-led review. This means a couple of very exciting years ahead for New Zealand start-ups.