For the 2nd year in a row, Chinaccelerator will be collaborating with us in many ways during the week of Mobile World Congress Shanghai, from 28-30 June. As part of the 4YFN experience, the acceleration programme will give local insight into what Shanghai is truly made of by giving a ‘behind-the-scenes’ tour of their co-working space, hosting a welcome session to encourage networking amongst attendees and will bring a selection of sensational startups that will offer the most cutting-edge ideas in technology today.
We wanted to find out more from this leading accelerator in China and learn more on the current Chinese startup ecosystem from an acceleration programmes’ perspective, so who better to contact than Chinaccelerator’s very own Investment Partner and Programme Director, Oscar Ramos, to find out a few things. Here is what he had to say….
Tell us a bit about Chinaccelerator and how it’s evolved within the Chinese entrepreneurial ecosystem since its conception
Chinaccelerator specialises in cross-border innovation, bringing global entrepreneurs with unique value propositions to China and helping local teams tap into global resources to boost their businesses. Usually teams in our programme already have a working product. Some of them have validated that people like the product and they have revenue. Our programme is focused on growth with zero cost of customer acquisition. This is very relevant to early stage startups who can’t afford today’s high customer acquisition costs, which are only affordable for well funded startups.
When Chinaccelerator started in 2010 in Dalian as the first accelerator in China and Asia, our focus was different: capitalising on the solid software development ecosystem and helping founders focus on prototype development. Over time the industry changed and the requirement to launch an initial prototype dropped. Today the value for acceleration lies more in finding a product-market fit quickly than product development.
As an international acceleration programme, are there significant differences that you have noticed between Chinese, Asian and European ecosystems?
Absolutely. Chinaccelerator is part of SOSV, “the accelerator VC” that runs 8 accelerator programmes in Europe, America and Asia. Additionally, some of the teams coming to Chinaccelerator are from our partner accelerators around the world. All of them help us understand the difference.
There are a lot of differences between China and the rest of the world. The Chinese accelerator landscape is still underdeveloped with fewer than 10 real accelerators across the nation. Thousands of incubators and startup hubs in China call themselves accelerators while they are just co-working spaces or training programmes. Most of them are local, run in Mandarin and are not really an option for international founders. SOSV runs HAX and Chinaccelerator, two of the top accelerator programmes in China according to various reputable rankings such as TechCrunch and the Economist, by a number of graduates, funds that are raised after the programmes and founder satisfaction etc. Both of them focus on cross-border and are helping to bridge ecosystems across many countries.
Accelerators in Asia, America and Europe operate similarly but still differ in some ways.The US market is the most developed with all the big accelerator groups, (Including SOSV’s three programmes — HAX Growth, Food-X and IndieBio). You see all types of accelerators there with their own specialisation. In Asia most programmes are sponsored by large organisations, governments or corporations. Europe seems to be dominated by private initiatives by independent groups, with some presence of American accelerators like Techstars, SOSV and corporate-back accelerators.
Tell us about the entrepreneurial ecosystem in China. What tech is currently considered fashionable? What is emerging and are there particular sectors booming?
China’s startup ecosystem is already very relevant globally. There are sectors such as fintech with more unicorns in China than anywhere in the world or Chinese business models like shared bikes that are “cloned” by other entrepreneurs globally.
The ecosystem is developing in parallel to the rest of the world but has its own characteristics. Most Chinese companies are still born in China, made for the local market, with no vision to go global. They compete not only in developing a good product and growing the business but also raising money very fast.
The bike sharing industry is a good example where speed is important. To win you do not need to have the best product but simply more bikes available – a better value proposition for the user that was expecting convenient access to bikes, even if the bikes were not very comfortable to ride on.
That creates a strong barrier of entry for entrepreneurs that cannot fundraise easily or fast enough.
What are your thoughts on how we can bring the ecosystems closer together to encourage better business relationships between everyone?
The key is to create win-win opportunities. Understand and focus on the areas that create value for entrepreneurs. Language is the first issue, but different cultural values and working styles are the real barrier.
Translation is a nice gesture, but focusing on the early adopters who are more open and interested in an international environment can create positive experiences and help build bridges naturally.
Do you think there is a lot of interest from Chinese investment in startups overseas, or is it mainly contained in China? Are there particular regions that seem to be popular with investors?
Chinese outbound investment has been growing from a macro perspective, but if you look closer the volume of investment in startups is not that high. Large companies like Tencent and Alibaba are listed under international stock exchanges but mostly focus on large investments in later stage companies. The ones who do early stage investment overseas prefer startups with strong technology IP or a clear China angle.
Silicon Valley is probably by far the most relevant region but Southeast Asia is also growing in interest with some specific regional funds backed by Chinese internet giants themselves.
Why have Chinaccelerator collaborated again this year with 4YFN at Mobile World Congress Shanghai?
The global character of 4YFN is a perfect match to our mission and due to this, we have collaborated with 4YFN not just in Shanghai, but during the Barcelona event too. We are one of the most active players in the space of the ‘early stage startups’ market entering to China, specially if you do not consider the private initiatives. We consider ourselves ecosystem players, creating more opportunities for global startups by bridging the gap into China. Our current batch of founders came from 11 different countries, highlighting the international range of our startups.
Regarding our delegation that will be present at 4YFN this year, we are still in the selection process, however I am confident they will be the best of the best cross-border startups with a global vision. Watch this space!
Chinaccelerator, a leading startup accelerator in China, is a mentorship-driven programme helping internet startups from around the world cross borders – from the world into China and from China to the world. It is operated by the venture fund SOSV with $300M AUM operating eight global accelerators. Chinaccelerator offers three months of rigorous guidance, training and resources from mentors, partners and investors. The robust and supportive alumni network continues into the startups’ post-Chinaccelerator lifespan. Since its inception in 2010, Chinaccelerator has helped 100+ companies build a China and global business.