Throughout 2016, after the excitement of playing host to one of the world’s most exciting and fastest growing start-up eco-systems, London and the UK faced increasing pressure to grow these early stage, sometimes venture-capital-funded enterprises into something more substantial and permanent; “scaling-up”, however, 2016 has taught us, is never easy to do.
The biggest obstacle to growth? Almost certainly the size and resources of the competition the start-ups face; big corporates, in-particular, have become more aware of the threat posed by smaller “challenger” companies, especially within the banking and financial services sectors, but still, a few notable exceptions aside, (transferwise, Spotify, ARM Technologies?) the larger, more established companies tend to hold most of the aces.
Small wonder, then that start-ups today are thinking about their acquisition or exit strategies before they have barely got their first product out of the door. What other choice do they have?
One option, provided by the team behind the Virtual Technology Cluster Group” (VCT Group for short) is to try to find ways for start-ups and larger, multi-national firms to work collaboratively.
The VTC Group describes itself as “an organisation which enables major multi-national companies to attract emerging and disruptive technology innovators into their supply chain”, and announces today that is ready to launch, in Q1 2017, its latest technology cluster, focusing on digital healthcare, and in collaboration with Deloitte.
The Deloitte VTC, it says “will aim to advance the digitisation of healthcare providers through improving access to human, digital capabilities and adoption of new, innovation technologies.”
Businesses and individuals can apply to join the virtual community by outlining what skills and innovative technologies they can offer, and will be rewarded with access to scale-up support and commercial mentoring from industry experts, says the VTC Group.
This is the second such project the VTC Group has instigated after they successfully launched a cyber-security-focused VTC in March 2015, partnering with Lockheed Martin UK, the aerospace and security multi-national. The cluster has already attracted more than “90 leading entrepreneurial IT businesses from start-ups through to publicly listed entities”, the VTC Group say, as well as attracting further sponsorship from Unilever, Dell EMA, and PA Consulting.
Auriol Stevens, who is the CEO of the VTC Group and also a member of the Advisory Board for the Institute for Security Science and Technology at Imperial College London and Director at Restoration Partners, The Technology Merchant Bank, working alongside visionary entrepreneurs, says the VTC Group are “delighted to partner with Deloitte” and that the they hope to:
“advance the digitisation for the NHS and further afield – in Deloitte, we have a multi-national organisation, passionate about enhancing the quality of healthcare through technology, with whom we can work to create an ecosystem that will lead to revenue and investment opportunities for all the constituents.”
Julian Hunt, a Partner at Deloitte, added: “we have long recognised the importance of connecting digital capabilities and innovative technologies with healthcare providers to accelerate the pace of the digitalisation”, noting that the “Virtual Technology Cluster model stood out for us as it focused on enabling the acceleration of digital capability, innovative capacity and investment opportunities.”
Hunt also noted that the success of the Lockheed Martin UK VTC had impressed the firm, “being a practical example of the connectivity delivering accelerating competitive advantage.”
Reading between the lines, it does seem likely that any start-ups and entrepreneurs who end up successfully applying for the cluster and being given access to Deloitte’s extensive network of contacts and resources, will be viewed as potential acquisition targets, or at the very least attractive targets for venture capital investment.
So whilst bringing an entrepreneurial, innovative and experimental edge to a multinational like a Deloitte or a Lockheed Martin will have the potential to create value, forge new ways of working and collaborative partnerships, start-ups may well still have to fight hard to maintain their independence.
But then, what start-up founder doesn’t relish a bit of competition?
Besides Auriol Stevens, the VTC Group is led by a number of Directors including Mike Kennedy, who has worked in Private Equity, with 3i amongst others, for over a decade, and Michael Wellesley-Wesley, a banker and technologist and advisor to Alpha Venture Partners.
Chairman Ken Olisa, OBE, is Founder and Chairman of Restoration Partners, and an IT industry veteran. The Group say they plan to develop a number of additional sponsored technology clusters focusing on different sub-sectors across the globe.