Back in March giant telco Telefonica opened the latest addition to its growing global network of startup incubators dubbed “Wayra Academy”. Wayra is the latest incubator/accelerator in London, joining Springboard, Seedcamp and Innovation Warehouse.
Now this is fair warning that the deadline for Wayra applications is about to close. So you better hurry.
If you’re wondering what the deal is with this latest in a long line of new European incubators, then here’s how it’s set up:
Telefonica takes around a 10% stake in a startup for up to €50,000 in funding, pocket change to a company their size. Wayra will put about 20 startups into its London building for six months, after which it will help them pitch for follow-on funding from other sources of venture capital. If after 6 months things are not working out I was told that Wayra will sell back their share of the company to the startup for €1. But check Ts & Cs I hazard. In exchange for all this Telefonica gets the right of first refusal on the companies. Clearly that provides some potential security in that you’ve basically got a potential buyer before you even start, but it’s not going to be very competitive if your startup gets a better offer from some other suitor. But if you’re a startup that needs to have a telecom partner at the off, this is a dream come true. Ultimately it plans to fund around 350 startups.
I think it would be good to get these all places singing and humming in London, which, at least according to the Startup Genome project recently, now ranks behind Silicon Valley and New York in terms of startup activity.