A compilation of important news from the startup world:
What do Asean region cities want from tech startups?
Asean’s two biggest economies are looking for IT partners beyond their shores to support their smart city initiatives – and some UK-based firms have been given a grand tour. From Dubai to Amsterdam, and from Manchester to Chicago, every progressive city on the planet wants to be a smart city, and the urban areas of Southeast Asia are no exception.A smart city is predicated on the convergence of many things – the meeting of industrial IoT with consumer IoT, ubiquitous connectivity and mobility, big data-enabling contextual awareness, and governments collecting and providing IoT infrastructure (M2M) through sensors and data capturing and sharing. And all this alongside a thriving startup ecosystem.At the core of it, smart cities are about improving quality of life and creating more opportunities. n Southeast Asia, a new digital silk road is being carved out, dotted with ambitious cities such as Singapore, Kuala Lumpur and Johore in Malaysia, Manila in the Philippines, Bandung and Makassar in Indonesia, and Bangkok in Thailand, to name but a few.This means opportunities for local and foreign enterprises and startups to help the region’s governments to build smart cities.To learn more about such opportunities in the Asean region, a delegation of 10 technology companies from the UK recently toured Kuala Lumpur and Johore in Malaysia and Singapore to pitch to governments, the private sector and investors.
Celebrity backing: Meet the athletes and A-listers investing in wearable tech
Now wearable tech startups are getting a helping hand too from some high profile investors whose involvement (financially and in name) can only be a good thing. These are just some of the A-listers and athletes that decided to open up the wallet and show some love to the wearable tech startup scene. Kutcher has a pretty good track record when it comes to funding up and coming startups. He’s invested in the likes of Spotify, Airbnb and also added the brain sensing Muse headband to that list. The stress busting wearable uses EEG sensors positioned along your scalp that’s able to measure brain activity in real time and uses audio cues to alert you to those stressed and calm moments. It raised just under $300,000 through an Indiegogo campaign but since then has racked up over $7 million in investment including Kutcher’s contribution.
Election 2016: Tech start-ups fear ideas boom will fizzle
Australia’s start-up community is waiting with a mix of frustration and pessimism for the federal election result after the probable loss of Assistant Minister for Innovation Wyatt Roy and the threat to Malcolm Turnbull’s $1.1 billion Ideas Boom national innovation agenda. Labor has claimed victory in Mr Roy’s seat of Longman, but the government’s start-up advocate is yet to concede.Creel Price, the CEO of Investible, said if the Turnbull government managed to get the numbers it would be important for it to continue making innovation a core portfolio and appoint a know¬ledgeable and passionate advocate.“If Labor manages to form government it would be great to see Ed Husic, MP for Chifley, ¬elevated given how instrumental he has been in bringing the plight of the start-up ecosystem and the need for regulatory change to the attention of policymakers,” Mr Price said. StartupAUS CEO Alex McCauley, who heads Australia’s peak start-up representative body, said whatever the final shape the parliament took it was important it worked cohesively to deliver good policy outcomes for start-ups. “Start-ups and innovation are a core economic priority supported by both major parties as well as the Greens and Nick Xenophon Team,” Mr McCauley said. “Our expectation is that an ambitious start-up agenda will continue to be pursued by all the key players. In a difficult period, this can be an area of strength for this new parliament.”
The fairytale is over: Why startups and investors need to stop chasing unicorns
In the harsh reality of servers, coding and disruptive innovation, a fairytale has been told over the last few years: the chase of the unicorns.It came to a head last year with everyone wanting the magic dust of a startup valued at over $1 billion.But this year has been a wake up call for both startups and investors with the chase paving way to more realistic growth expectations and many startups stumbling and falling as reality hit.In April 2014, there was only one company valued over $10 billion and 43 over $1 billion. Now there are 14 valued at over $10 billion and 169 at over $1 billion, with Uber leading the charge.Like Uber and Square, most unicorns have typically grown superfast, fuelled by VC and angel funding. Their initial focus was on scaling the business. Likewise for other for the millions of tech startups chasing their unicorn dreams, revenue generation was a secondary concern.But then, like all fairytales, this too started to end with reality hitting from mid-to-late last year. Snapchat, Dropbox and Square – some of the most highly valued tech startups – sent tremors of concern through the industry after being devalued late last year.Many companies felt the burn as they went through funding with little revenue to show on the other side.Just this month in Australia, Queensland-based music streaming startup Guvera’s future was in jeopardy after the ASX blocked its listing. Which to many doesn’t come as a surprise given that Guvera’s own prospectus showed revenue of $1.2 million and net loss of $80 million in 2015.
How to combat your company’s tech hiring bias
There has been a lot written about diversity (or the lack thereof) in the tech industry. Even with Fisher v. University of Texas at Austin, the recent U.S. Supreme Court ruling upholding affirmative action, tech companies are looking for alternative approaches to increase diversity. The first step is combating hiring bias. A recent survey found that black and Hispanic computer science graduates were less likely to be hired than their white and Asian counterparts. The statistics on women in tech aren’t much better, with women also being systematically underrepresented and making $10,000 less than their male counterparts.But there is one simple thing that we could all do that would greatly reduce this the hiring bias. The effects are well-documented and the costs are negligible. As administrators of The Data Incubator, a selective fellowship that helps students and industry practitioners find jobs as data scientists, we practice this in our admissions process and as a result, half of our current tech staffers are minorities. Not only is it cheap and simple to implement, not only is it fairer for minority applicants, but we believe it allows us to find more talented applicants. What is it? Getting rid of the traditional resume screening. Technologists come in all stripes and defy simple racial, sexual, academic, and professional categorization. Just as you would diversify a stock portfolio, a company should diversify its talent stock to broaden its capabilities. And groupthink can have very serious effects on the global economy: A recent Bank of England report cited groupthink as one of the contributing causes to the 2008 financial crisis.
Venture capital spend on European startups has fallen by $1.5 billion
Venture capital funding for European technology startups is down $1.5 billion (£1.1 billion), according to research firm Pitchbook. The research shows that funding fell from $4.3 billion (£3.2 billion) in the second quarter of 2015 to $2.8 billion (£2.1 billion) in the three months that ended last week.Despite the EU referendum, UK startups received by far the most funding in Europe in the most recent quarter, taking $994 million (£748 million) of the overall $2.8 billion (£2.1 billion). London Startups like fashion website Thread and children’s book producer Lost My Name raised £4 million and €4 million (£3.4 million) respectively during the most recent quarter, while many other companies raised similar sums. However, the UK’s decision to leave the EU may have contributed to the decline in investment across the continent, according to Malcolm Moss, founding partner at UK and US based venture capital firm Beringea. “The uncertainty triggered by Brexit has certainly inhibited investment,” said Moss in a statement. “However, there is still a massive amount of capital looking for a home. In some ways it is a good time to invest as valuations are coming down and we can source good deal flow.”
Opinion: Brexit is a tragedy, but it could be the making of UK Fintech
Let there be no doubt – Brexit is a tragedy. Instead of taking on challenges with its European partners, Britain is taking precisely the wrong course, injecting needless uncertainty and negativity into the economy. Tech will particularly suffer. The UK’s start-up scene, nurtured by international venture capital and skilled workers’ willingness to move here, was starting to create global challengers – and thousands of well-paid jobs. Development will now stall as companies struggle to find the staff and cash they need to scale.Gloomy projections of London’s forthcoming tech decline are now ten-a-penny. And for financial technology, forecasts are particularly bleak, with banks and start-ups alike seen ready to abandon the UK for more welcoming climes in Dublin, Paris, Stockholm or Frankfurt.However, these fears are overblown. Indeed, Brexit could be the making of the UK’s fintech sector – and even the trigger point that transforms some British companies into world leaders. The reasoning is simple. London is the financial centre of the world, based on its banking hegemony, its role as the global hub for foreign exchange, and passporting rights – which allow international financial firms to operate across EU member countries. Ultimately, Brexit could create opacity in the markets and a regulatory quagmire. This is unfortunate for the UK and the economy, but it also creates precisely the right environment for fintech firms to thrive. UK startups will act where the financial institutions can’t and provide innovative solutions to new problems, helping consumers and businesses use their money more wisely.