The model of building vertical market-specific accelerators is now well known, but in the UK, Founders Factory, which has emerged from Lastminute founder Brent Hoberman’s stable of projects, is poised to take it to another level.
Today it launches Founders Factory Retail, a joint venture with UK retail giant Marks & Spencer’s, focused on investing and growing start-ups. M&S will become Founders Factory’s exclusive UK & European partner, and invest in a number of start-ups, sourced through Founders Factory’s network, which will expose the retail business to new “technologies, business models and entrepreneurial thinking”.
M&S famously admitted it had a ‘burning platform’ recently, so it’s to be hoped this startup DNA will re-energise the company. M&S will become the majority shareholder within the JV.
Steve Rowe, Chief Executive said: “Partnering with Founders Factory as their exclusive retail partner gives M&S access to a global network of start-ups and entrepreneurs which will provide disruptive thinking and questioning to the way we work at a time of critical transformation within the business. Founders Factory have a great track record in creating successful businesses and by investing in new innovative technologies and products we hope to change the way we work and operate.”
Brent Hoberman, Co-Founder and Executive Chairman, Founders Factory: “We are excited to partner with M&S as our exclusive retail investor in the UK and combine the company’s scale and experience to support early-stage founders. After over 60 investments in the last two years we have seen the huge potential of combining startup innovation with corporate scale and expertise, and so we are excited by this new chapter in a sector that is changing rapidly through technology.”
Started by Brent Hoberman and Henry Lane Fox, Founders Factory has received investment from L’Oreal, easyJet, Guardian Media Group, Aviva, Holtzbrinck, CSC.
The idea is that as well as accelerating companies it also incubates them, thus creating, from scratch, around 13 new startups every year. It also invests in 35 startups every year, investing cash, six months of support and provides commercial opportunities with their investors. To date, it’s backed and built over 60 companies and is aiming for 220 within five years.
In an interview with TechCrunch Hoberman added: “This deal with M&S is a new model for us. We expect to expand to more sectors in this way. M&S is an iconic British brand so it’s a really good next step for us. We think we’re succeeding because of the sheer nature of the ambition we have for the project. Just funding an accelerator would not be as successful as this combination of best ideas from the cross-fertilization of sectors, big corporate partners and the network of experience we can tap into.”
“This is a bespoke program with a full-time team of 60 operational people to help. It’s a very different model from the likes of Techstars or Startup Bootcamp, for instance. It has full-time employees and multiple corporates. We have seven corporate backers with shared equity, then on top have WPP’s Wunderman agency. I think this is a globally innovative model. We didn’t copy this from the US.”