Big data has the potential to transform multiple industries – healthcare, agriculture, sustainability, manufacturing, transportation. That said, shortage of talent, entrepreneurship incentives, and open innovation mindset has historically hindered progress in the field for European businesses. In recent years, the EU has been trying to change that with initiatives such as the European Data Strategy and The Data Act – aiming to almost triple the value of the data economy in EU 27 by 2025 (to €829 billion) while increasing the number of data professionals from 5.7 million to 10.9 million in the same period.
The European Commission has also been pushing concepts such as secure data sharing and access, use of Artificial Intelligence and Machine Learning in order to establish an environment of trust based on big data.
From this perspective, a concept of Data Value Chains emerged, taking the data economy to another level. It was identified that to facilitate large-scale deployment of data based products and services, a holistic and structural support programs are needed to foster multi-stakeholder innovation experiments and facilitate develop secure and privacy-aware analytics solutions.
Acting as such facilitator, REACH Incubator seeks to support different maturity stage startups working in the data space. The ideal applicant will leverage or build on the B2B business model to employ a dataset coming from an established SME or a corporate in order to solve their business and therefore, market-driven challenge.
To learn more about how REACH intends to change the status quo, especially for startups in Eastern Europe, today we talk to Aleksandar Zobec, Project Manager and Elena Blagoeva, the program’s Communications Manager.
The Recursive: What are unique gaps for data startups in Eastern Europe the REACH incubator is aiming to bridge? What’s your unique value proposition compared to other programs?
Aleksandar Zobec: REACH Incubator is a cascade funding program. It has been structured to lead the startup from the product or service conceptualization stage, all the way through the experiment stage and commercialization stage. Phased funding, mentorship, infrastructure and software availability is appropriately positioned to make sure that the startup delivers a market-ready solution.
Via this program, Eastern European startups have access to large European corporations, their datasets and their challenges which inherently ensures that their solution is market-driven. Additionally, at the commercialization stage, startups receive funding and direction to attend European flagship events such TNW, Slush and Web Summit.
Finally, the European Commission is adamant to expand its REACH (pun intended) to Eastern Europe (that fall under the Widening Countries) in the form of these structural programs aimed at innovation support. Majority of the applicants usually come from the Western European countries, however, untapped potential lies in these regions and REACH Incubator is really looking forward to identifying and supporting the next generation of data-driven startups.
In your opinion, what’s the potential for development of big data and data value chain innovations in the region?
Aleksandar Zobec: The Eastern European innovation ecosystem has been slowly exposing itself to open innovation, and data sharing still seems scary for many corporations. Corporate Innovation Managers have realized the importance of engaging with external innovative ventures, however are still very much constrained by its internal processes, data management regulations and require a safe space to explore novel partnership opportunities.
Startups, on the other hand, are inherently flexible, innovative and proactive in seeking market opportunities for their novel tech innovations. The opportunity lies in this mindset shift. Many traditional corporations in these regions have an opportunity to fully leverage big data analytics by embarking on the creation of multistakeholder data value chains and further gain insights into the data they are generating. Such an endeavor is facilitated with a proven methodology and intends to transform their businesses using the power of big data.
In terms of diversity, from your observations what’s the current state when it comes to the participation of female entrepreneurs in the big data space? And what do you think can be the role of REACH in improving the gender balance?
Elena Blagoeva: There is a general lack of representation when it comes to female founders and entrepreneurs within the big data ecosystem. There is also a big imbalance when we bring up the topic about females in leadership positions.
The issue is actually quite substantial and there are many reasons for it, such as women dropping out of tech more often than men do, women being the primary caregivers within a household, traditional societal division of labor, facing more negative consequences when risk taking, as well as lack of female role models in this field.
Furthermore, female founders are finding it more difficult to raise investment for their startups. This is why sometimes women take male co-founders on board, so that they can improve their chances of receiving funding.
There was a very interesting study done some time ago, looking at the gender imbalance as a whole within the startup ecosystem, when it comes to venture funding. Apparently investors ask more goal-oriented questions to male-founded startups, while the questions they asked females were more related to prevention and risk. This means that investors see more potential in male-led startups.
There are a few programmes that target exclusively female-founders, providing financial support and mentorship. REACH Incubator, on the other hand, focuses more on gender inclusivity and equal opportunity.
However, even in the context of our previous Open Calls, we saw little interest from female entrepreneurs. We believe this is the case due to the fact that there aren’t that many to begin with. With REACH we would like to present this big data incubator, as an opportunity for female founders to grow, get support and create meaningful and fruitful connections with relevant stakeholders within the big data ecosystem. For the final Open Call we would like to attract as many female founders as possible!
Apart from this, it is really nice to see our startups evolve. Our Round 1 startups reported a change of 30% when it comes to the gender balance of their teams, while our last year’s startups reported an even bigger percentage increase – 60%!
What makes you believe that REACH can change the status quo?
Aleksandar Zobec: REACH Incubator goes where no one has gone before and that is to nurture the data-driven ecosystem of players and provide a plethora of services carefully placed along the development phase of one startup.
Methodology facilitating this journey ensures that the Intellectual Property developed by startups remains in their hands, all the while transforming the mindset of a siloed innovation development of a corporate to establish a secure data sharing process, receive a tailored solution to their business challenge and establish a long lasting collaboration post REACH.
Can you share any success stories from previous editions?
Coming from Serbia and winner of REACH Round 1, Cropt managed to build a strong ongoing collaboration with Delta Data Provider in new pilots while approaching banks and started providing yield prediction and risk assessment service. They also won the Banca Intesa / Sanpaolo Tech Bank competition.
Last year HOPU, a company developing Air Quality, Smart Cities and Infrastructure solutions, was acquired by Libelium. Since participating in REACH, the team also closed new business deals with the likes of Cadiz Municipality, La Manga, and Arona and attracted €1M in funding from Axon.
Tsenso is currently working on a 10-month field validation with MiGROS to evaluate the quality of incoming fresh produce and provide data to optimize warehousing and selling decisions to reduce food waste.
REBASE is collaborating with Hitachi Energy, a partnership that we initiated during the REACH Incubator with a total contract value of €250k+ and potential to grow. Mentors from REACH helped them with strategy and negotiation training that largely contributed to making it a success.