As part of officially launching our new program and to pay homage to where we started, we gave an exclusive interview to deutsche startups last December, and answered some great questions about our METRO Target Retail Accelerator, the original is in German, which you can view here, for the English version keep reading.
“Scaling requires more than just a good business concept” says Sylvia Dudek. How METRO & Target are working together to help start-ups breakthrough the challenges of scaling, and restricted opportunities of piloting with big corporates: An interview with Sylvia Dudek, Program Director at METRO Accelerator and Sabine Flechet, Director of Innovation Fund, at LeadX Capital Partners.
Why create a new retail accelerator?
Sylvia Dudek: Successful scaling requires more than just a good business concept. Important is: investment, piloting and international scalability. Startups from our previous programs, such as Oriient, who developed a solution for indoor navigation, or Whole Surplus, whose concept contributes to combatting food waste, have repeatedly shown us how helpful it is to test and maintain a product in a pilot under real conditions. Through our cooperation with Target, we are able to even further expand on this value add. In addition, we hope for fresh business concepts and innovations that help improve the shopping experience of our wholesale and retail customers.
And how come you chose Target as a partner?
Sylvia Dudek: METRO and Target have so far, each conducted Retail Accelerators separately with Techstars. This cooperation not only brings together two programs of two big players in retail and wholesale, but it also unifies their networks. In the future, our founding teams will be able to draw from a pool of over 300 mentors and group executives. With its B2C orientation, Target complements METRO’s B2B focus. By working together, we can offer participating companies a broader spectrum of piloting opportunities across the entire value chain of the industry; from the backend to customer facing and everything in between.
What are the differences between the new program together with Target and the previous METRO Accelerator for Retail program?
Sylvia Dudek: Such an accelerator has simply never existed before! Just like we love the entrepreneurial spirit of our founders, and aspire to attract first movers, we like the idea of trying something different, to be able to consistently improve and adapt to the business needs of our participants. While before the focus was on the development of early-stage start-ups, and we helped with identifying product-market fit, with this program we focus on business development for later-stage start-ups. With the help of Techstars, we implemented their standard program three years ago and thanks to that, and our experiences, in this program we have been able to further develop and optimize what we have done before. Together with our partner, Target, we have set up a unique program that differs conceptually, in that we focus on growth and international scaling. Starting May 2019, we will spend part of the approximately 14-week program with 10 selected start-up teams at Target’s corporate headquarters in Minneapolis and the other part at the METRO Accelerator headquarters in Berlin.
To what extent do you support and invest in the startups?
Sabine Flechet: Each start-up receives funding of up to USD 120 k and is supported by the infrastructure, network and know-how of METRO, Target and Techstars. The convertible loan will be provided in equal parts by METRO and Target. Techstars also has the option to invest – in which case the financing of USD 120 k will be equally distributed across all three investors.
Will METRO and Target be able to claim shares for themselves automatically?
Sabine Flechet: Only if the convertible loan is converted into equity do the parties become shareholders. We spend approximately three intensive months with each of the companies and support them in preparing their business for scaling and internationalization. At the end of the program, and provided our companies and the start-ups have a mutual interest in continuing to work together, a commercial agreement can be made. In addition, we will continue to support the start-ups with our investor network and fundraising activities beyond the program. The program will make them part of our portfolio and our growing global community.