Accelerators are far from a new idea. IdeaLab, the first of the type we’ve become used to, was founded in 1996 by Bill Gross and is still going.
But the approach is now starting to be picked up by companies far outside the startup world. The latest and most intriguing comes from Bayer Healthcare, making it the first pharmaceutical company to explore the model as a way of encouraging innovation.
Bayer has a market cap of over $111 billion, but announcing the accelerator its Head of Marketing & Sales IT, Christian Ullrich, told Venture Village that “innovation and healthcare cannot only be driven by the industry and also needs creativity”.
The company began by launching Grants4Apps as a crowdsourced initiative in 2013 but decided to expand it into a fully-fledged accelerator this year.
A new high
The promise of wearables coupled with the challenge of an ageing population and a growth in investment interest has produced plenty of healthcare accelerators.
What’s interesting in the case of Bayer is that we’re talking about a company predominantly focused on producing new drugs, and therefore operating in a highly-regulated sector, seeing the benefit of a startup approach.
Bayer’s accelerator received 70 applications in its first round of which five companies from across Europe have been selected to participate in a three and a half month program.
Each startup will receive €50,000 in financial support, mentoring and office space in Bayer Healthcare’s Berlin headquarters. Bayer will take no more than 10% equity in return. Four of the five companies in the first batch are producing hardware.
John Lewis was an another interesting entrant into the accelerator space this summer.
JLab, based at Level39 in Canary Wharf, narrowed down a list of 163 entrants to five finalists. With a focus on new retail technologies, the first batch includes in-store digital engagement, wireless sound systems for smart homes, online 3D room planning and smart labelling.
As well as receiving office space, the JLab participants have received initial funding of £12,500 for a 4% investment and access to John Lewis’s APIs, data and platforms.
When the 12-week programme ends in September, a winning company will be selected by the JLab mentors, receiving up to £100,000 in further investment and the opportunity to trial their solution in-store.
The rise and rise
John Lewis and Bayer are just two examples of many large companies getting into the accelerator space.
It’s easy to be cynical about the motives of established commercial players fostering batches of startups, but the benefits are obvious. Accelerators under the umbrella of established companies give startups immediate access to scale and industry expertise.
More accelerators in industry sectors that have not previously tended to support the startup mentality can only be a good thing.
Corporate accelerators have to be more than a stunt to give an old-fashioned business a thin sheen of innovation, but done correctly they can create brand new markets.
The arrival of startup-style thinking in an industry as slow-moving and regulation-bound as pharmaceuticals should be inspiring for all of us.