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European startup accelerators are gradually revealing their performance figures

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With the rise of numerous accelerator programs in Europe one cannot help but wonder whether jumping through the application process hoops, sweating through the mentoring sessions and flirting with investors at demo days are all worth a founders’ time.

When I attended the recent Startup Sauna demo day in Helsinki in December 2011, I met teams not only from Finland but also from Russia, Poland and the Baltic Rim. I was amazed how young many of the participating entrepreneurs were. So when the performance stats from Startup Sauna hit my mailbox I was curious to learn what actually happens to all those startups after they complete the seven-weeks-long coaching program in the startup co-working space Aalto Venture Garage.

Of course, it is too early to judge the results of the most recent Demo day, but up until October 2011 the teams and their results were counted by Startup Sauna coach Paolo Borella.

Startup Sauna is funded by  Aalto University Center for Entrepreneurship and the Finnish government (via Tekes). It takes nothing in return for the coaching program, and covers accommodation and travel costs. But interestingly, this is the most comprehensive report on an accelerator performance I have seen.

Here are the main findings.

Within the first year of Startup Sauna operation, it saw 36 out of 38 alumni companies raising 8.2 million Euros, and almost 30 percent raised over Euro 260 000. One of the startups Blaast, a cloud-based mobile platform for those who use mobile phone as the only access to the Internet, has received Euro 2.8 million ($3.7 million) in funding from founding engineers of Skype amongst others.

As far as deal funnel goes, the Finnish accelerator, which screens startups during on-location coaching sessions called Warmups, has received over 500 applications, met over 250 teams and admitted 54 of them. The acceptance rate went down from 23 percent in the first batch to 7 percent for in 2011.

Subsequently it saw 38 teams graduate, 71 percent of which are still working on their product. Out of 29 teams who responded to the survey, 34 percent have launched a commercial product, while another 42 percent are in private beta.

To compare Startup Sauna with other European accelerators I asked Jon Bradford of Springboard, Kirsten Campbell of Seedcamp and Luis Rivera of Startup Bootcamp Madrid if any KPI were available for public consumption.

Bradford, who still accepts applications for Springboard London until Sunday, shared observations about fundraising efforts of 10 teams from the August 2011 batch (230 startups applied). Six months later five out of ten startups have either raised new funding or received offers. But it would be unfair to compare Springboard to closely with others at it is barely a year old.

According to Rivera of Startup Bootcamp, five out of the nine teams of in the first batch of the Startup Bootcamp Madrid program have raised total of Euro 770 000 ($1 million), the highest investment being Euro 500 000. For the rest of the teams the fundraising efforts continue. In total the accelerator received over 300 applications, of which 115 were qualified submissions. This makes Startup Bootcamp acceptance rate similar to that of Startup Sauna.

Kirsten Campbell came back with the Seedcamp stats as well. Out of 2,000 startups that apply in a year, 10 percent attend mentoring sessions, and out of those 10 percent get funded. Once Seedcamp invest, 90 percent of their portfolio companies raise further funding as well. Between 2007 and 2009 it supported 22 teams, which have collectively raised over Euro 30 million in venture investment. So on average Seedcamp has a larger base to work from, especially as applications came from 30 countries so far.

Revenue, profitability and exits would be a useful KPI to look at once startups cease being startups and become fully fledged businesses. But for starters 95 percent of fundraising success rate is a pretty good result for Startup Sauna and its graduates. Here is their full report.

In 2011 Antti Ylimutka, Ville Simola and the coaches travelled throughout Scandinavia, Russia, Baltic countries and Poland to select startups for the program. From what I hear, their ambitions in 2012 is to go global.