BMW was founded in 1916 and has an established pedigree as a leading car manufacturer. Fast forward 100 years, and the company has just launched its first incubator programme for UK startups.
“We wanted to set up a programme which plays to our strengths, but also offers something to startups, and provides something exciting for our customers, in a faster timescale,” Jonny Combe, general manager of product and channel development at BMW, tells Techworld.
Schemes where large, old corporates are matched with new, innovative startups are growing in popularity across a range of industries, but BMW claims its programme is a first for the UK automotive sector. A year on, BMW is on the hunt for a new cohort, with applications due to close on 15 October.
The carmaker signed agreements with four out of five of the winning startups from its inaugural 2017 scheme, including Wrisk, an insurtech startup that has built a flexible motor insurance app.
“We were a split camp over whether it’d be a distraction or a great idea. We got onto the scheme having never participated in an innovation lab. All I can say is it exceeded expectations on every level,” says Wrisk CEO and cofounder Niall Barton.
BMW partnered with corporate accelerator specialists L Marks to run the programme, which ran for 10 weeks. BMW didn’t take any equity or offer a cash prize. “Key to the programme is access to senior execs, specialists, our retailer network and customers,” says Combe.
BMW shortlists applications down to 25 then invites them all in for a pitch day. At the end approximately five are invited onto the incubator scheme.
“Criteria include meeting customer needs, whether the startup fits into our strategy, and just if we could we work with the people,” Combe says.
He admits that there is a big culture clash between corporates and startups, but says this is “part of the joy of the whole thing”.
“One of the startups asked to speak to three people from different parts of the business. He said he was there until 7pm. It was 2pm. His default setting was the next few hours whereas ours was schedules, calendars and PAs. We learned it’s not okay to wait two weeks, sometimes it has to be the next 24 hours,” Combe says.
Wrisk, which is backed by Munich Re, had the founding idea of an intuitive ‘all-in-one’ insurance app. The company has had to change tack slightly and focus on motor insurance, according to Barton.
Wrisk has signed a letter of intent to launch a car insurance app with BMW UK, its first main corporate partner, although Barton keeps schtum about when it’ll go live.
“Ultimately the clearest metric for success is how many commercial relationships emerge. We’re very happy. It wasn’t just a vanity project – we achieved very clear outcomes,” Combe says.
Startup Divido, which provides loan servicing to make paying in instalments simpler, piloted with six BMW retailers during the accelerator scheme, before rolling out to 50. It is now planning to get to the whole BMW UK network of 145 retailers by the end of the year. “Getting products to market that our customers love in a far quicker timescale than our competition is one of the key benefits for us,” Combe says.
However, BMW didn’t proceed with a commercial relationship with one of the startups: Warwick Analytics.
Combe says: “What they’d put together was interesting, just not compelling enough for us to invest a lot of money…we never aimed to have commercial arrangements with five out of the five.”
Barton recommends the experience to other startups as a “great way to get the attention of customers”. However he adds startups should “be very clear which scheme you enter and what you want to get out of it. Ensure there’s a match of expectations on both sides.”