Poland: The Next Start-up Nation
We recently hosted our first meetup for start-ups in Warsaw, inviting our colleagues, Mickey Steiner and Elad Hameiri, from our Tel Aviv team to share their experiences and perspectives from one of the world’s most advanced start-up ecosystems. Mickey and Elad also provided best practice advice to the assembled investors, start-ups and the wider business community on building and cultivating a world-class start-up ecosystem.
We caught up with Alina Prawdzik, Head of ‘Smart & Connected’ and CEE at the innogyInnovation Hub, to find out more about the start-up scene in Poland and the CEE region.
What does innogy Innovation Hub do and what are your plans for the CEEregion?
innogy Innovation Hub’s mission is to create the future of energy. We seek to identify the game-changing technologies, individuals, businesses, and ideas that will help to build that future, providing funding, mentoring and a platform for co-creation, collaboration and convergence. We strongly believe that the disruptive technologies, services and business models that will drive this fundamental change could be from across industries and may be located anywhere globally – including Central and Eastern Europe! So far we have created a €150 million portfolio and provided opportunities for 80+ start-up and scale-up companies to collaborate internationally across our ecosystem including in Germany, UK, Israel and the US.
CEE is a very diverse group of countries but there are a number of broad factors that make it an interesting and attractive region, not least as the Warsaw meetup confirmed, that there’s a vibrant and eager start-up scene! It’s early days here but we’ve already made some great connections and built up a strong network of partners.
It is no surprise that innogy Innovation Hub invests in startups in the Silicon Valley – the home of Windows, Apple, Google or Facebook, Tel Aviv – the first instant messaging client ICQ was created in Israel, London – where Shazam was born, or Berlin. How does CEE compare and could you provide some more insight on what’s going on in the CEE start-up scene?
Central and Eastern Europe is a bit of an undiscovered jewel. Everyone is familiar with the vast startup ecosystems in Silicon Valley in the US and Tel Aviv in Israel, but few people know about Warsaw and the CEE region as a whole. It’s an oversight that we as global and experienced investors intend to correct.
There are a number of factors that make it an interesting region from our perspective. First, it has a highly educated population, particularly in the areas of science, mathematics and computer science, which are highly relevant areas for us. There are also a lot of entrepreneurs in the region; for example, there are more start-ups per capita in Estonia than there are in the UK. However – and with the exception of Poland – compared with other regions access to capital is fairly constrained, while company valuations and the cost of accessing talent are lower.
We know there are excellent startups and visionaries with game-changing ideas in this part of Europe and often these companies struggle to find funding and opportunities to scale outside their home market. This is where we come in. Finding the right companies to invest in can be tricky, so when we at innogy Innovation Hub spot a gem and decide to work together, we do our best to help the company grow, exponentially if possible.
Over the past decade, innovation driven by startups has become a global trend that is reshaping the world and economies worldwide, making what was difficult yesterday and impossible a year ago our new reality. Today there are many companies that have joined start–up incubators, accelerators and scaling programmes. At the same time, there is a growth in the number of venture capital firms as well as CVCs investing corporate funds directly in external startup companies. How is innogy Innovation Hub different in all this?
It really all starts with our belief that the energy market of the future will be entirely different than it is today, driven by four core global trends: decarbonisation, decentralisation, digitisation, and democratisation. We’re playing an active role in trying to create that new energy sector through sector disruption. This involves identifying the technologies and start-ups that will help build the future of energy, wherever they are. And we don’t just provide funding, we’re strategic investors. We actively promote collaboration between, and provide partnership opportunities for, disruptive businesses; providing access to in-depth knowledge, networks, and resources to co-create the future.
For example, in the UK we are currently involved in a partnership with Telefónica Open Future’s Wayra UK and the Catapult Network, an initiative overseen by the UK’s innovation agency, Innovate UK, to support start-ups accelerate their growth in the UK and beyond. The first cohort features six of our portfolio companies, who are being given access to incredible mentoring and networking opportunities. This is just one of the many initiatives we are involved with globally to help accelerate the growth of our portfolio companies.
Why would start–ups want to cooperate with innogy Innovation Hub?
At innogy Innovation Hub, we are experienced investors and reliable partners with a long-term success mindset. With our international presence and strong network, we can help businesses scale in other exciting innovation ecosystems globally. For example, we can provide introductions to potential new customers as well as provide access to local innovation mentors, experts and acceleration programmes. Moreover, we’re part of a big corporation ourselves, so if we see a strategic fit that will enhance our energy business and improve the services we provide to our customers, we’ll be happy to make the introductions to our top decision-makers.
What does the selection process look like at innogy Innovation Hub?
Our selection process can be divided into several stages. First, there is establishing contact – this could be at one of the many industry or start-up events we attend or host – such as the Warsaw meetup. There’s also the website or our social media channels such as Twitter, LinkedIn Facebook and Medium.
Next, we invite selected companies for a meeting or a call during which we evaluate and discuss the business plan and we try to understand the idea behind the product, the company’s vision, and get to know the team. Together we will discuss the market and the product’s competitive advantages. When this stage is complete, the start–ups that were evaluated positively are introduced to the technical experts within the appropriate focus area; be that Smart &Connected, Machine Economy, Cyber Ventures or Disruptive Digital, so the technology’s potential and product-market fit. Can be further assessed and evaluated.
Assuming this stage is fulfilled, the best companies are invited to enter a due diligence process which, if successfully completed, ends with an investment agreement. At the heart of this, it is essential that the company shares our strategic vision to create the energy market of the future and our commitment to collaboration and co-creation.