Scale-ups: corporates and start-ups grow together

Growing success of partnerships between start-ups and corporates

Over the past few years, I have been devoutly preaching the importance of collaboration between start-ups and corporates. It’s sometimes been a lonely and painstaking task, but I’m delighted to see that they are increasingly working together. On 19 November I attended the How To Get There Summit in Rotterdam, and I was delighted to hear the Dutch Minister of Economic Affairs, Henk Kamp, talking in hopeful terms about the future of the Dutch start-up ecosystem. Among other things, he praised the key role being played by corporates. The fact that he mentioned the partnership between ABN AMRO and TSO Munt Square as a shining example was a great compliment for all concerned.

Opportunities for long-term collaboration

The Netherlands has the best start-up climate in Europe, and that’s something we can be justifiably proud of. But we can’t afford to rest on our laurels. We not only need to concentrate our efforts on nurturing starters, but above all on creating stayers. Corporates and start-ups need to focus earlier on partnerships with the potential to scale up quickly. Promising start-ups need a number of things: a market, growth capital, an extensive network and advice. We look for reliable new technologies which increase our flexibility and add to our services. When you look at it like this, it’s just a matter of finding the right match.

From experimenting to better selection

At the Innovation Centre, we have embarked on more than 15 partnerships with start-ups over the past year. We deliberately set ourselves a number of learning goals. We were mainly focused on experimenting: what happens if you bring together two totally different organisations? And are the technological solutions you develop together actually perceived as solutions and used in the way you had imagined? Partnership was thus not seen as an end in itself, but as a means of learning. And we certainly did that.

In reality we regard all the partnerships as successes, even where they didn’t lead to the envisaged end results, or where it turned out that we weren’t a good match for a particular start-up. Even those partnerships produced lots of valuable insights for both parties. On the other hand, the experiments led to a number of lasting partnerships – enough for us to be able to talk of collaborative innovation. The question now facing ABN AMRO is how we can use all the lessons learned to find more start-ups with the right organisational match and the potential to scale up.

Hypes, unicorns and the sweet spot

I am also seeing a trend starting in the market towards scaling up and collaborative innovation. It’s very telling that Neelie Kroes, the Dutch Special Envoy for start-ups, talked almost as much about scale-ups as about start-ups in her speech at the How To Get There Summit. Personally, I think it’s not before time that these businesses are receiving more attention, with examples like Catawiki, Elastic Search and WeTransfer. The media focuses almost exclusively on hypes: failing start-ups or overvalued unicorns. That’s hardly surprising if you look at it clinically, because we’ve known for years that the success rate for start-ups is around 10% and that pumping investment capital into growth sectors generates overvaluation

If you look through the hypes, the underlying trend remains the same. The impact of technology is knocking some sectors out of kilter and rendering existing business models out of date. That’s why it remains key for start-ups to scale up rapidly, while corporates need to do all in their power to become more flexible. Somewhere in the middle is the sweet spot for FinTech partnerships, and that’s what our bank is looking for.

First scaled-up partnership achieved

The recently announced beta release of ABN AMRO Grip is a great example of this. This app, which gives clients greater control of their financial affairs, is based on a concept and technology developed by Tink, a Swedish FinTech start-up which was looking for a partner in ABN AMRO that would enable it to scale up internationally.

During the beta phase, the service is only available to 10,000 clients. This is the first time the bank has used this approach: normally, we would launch a fully functioning product for all our clients at once. We are thus quietly becoming more flexible and increasingly starting to work like a scale-up: constantly improving and growing thanks to feedback from users.

Digital Impact Fund

Our Digital Impact Fund creates a strong bridge between the bank and start-ups looking to scale up. It is aimed at businesses with a strong basis: a functioning service, a large group of users and a stable turnover. In addition, it must be possible to integrate the service smoothly into our infrastructure, and the cultural fit is also important. Things have to ‘click’ organisationally. We can then bring a product to our clients more quickly.

Scaling up our innovation ecosystem

Plans have been in the air for years to create a meeting place for innovative companies in the centre of Amsterdam, following the example of San Francisco. Together with TSO, we have created Munt Square, a co-working space in the heart of the city which shows how important we think it is to have a location dedicated to innovative talent.

The decision was quickly made when The Next Web asked us to become a founding partner of ‘X’. This new innovation hub brings together a strong mix of ambitious tech start-ups and experienced corporate partners such as Google, Booking.com, KPMG and ABN AMRO, and has the potential to become the scale-up hub of Europe, offering scope for the individual start-ups to grow to around 20-25 staff. For ABN AMRO, X offers a great opportunity to strengthen our position within the start-up community, as well as providing us with an environment in which we can set out to meet our FinTech ambitions.

New Year’s resolutions!

FinTech will become increasingly mature in the Netherlands. Following the success of Adyen, we are now waiting for the next scale-ups. In London, you now can’t move for FinTech initiatives, but we in the Netherlands have an opportunity to grow into the strongest FinTech hub on the European continent. To do this, we will first have to create an environment in which FinTech start-ups, corporates and financial institutions are given the scope to work together.

‘X’ offers the ideal location for this cross-fertilisation to take place. But opportunities will also arise elsewhere. For example, Holland FinTech has grandiose plans for its own FinTech building. So there’s plenty still to do in 2016: let’s scale-up FinTech!