Why join an accelerator program again?
Whether accelerators are helpful or a waste of time depends on several factors, and we, at CityFALCON, have declined a few of these that have approached us in the past. Apart from whether they can be helpful or not, I’m also concerned with the equity and the less publicised unethical terms such as warrants in the fine prints of their term sheets.
We had graduated from Microsoft Accelerator in 2015 which was extremely fruitful for several reasons described here. Microsoft didn’t take any equity and instead provided us with free credits for the products and enhanced technological support. It was a great support on the tech side of things but we needed some support in growing our clientele in the other segments within financial services.
Why Octopus Labs?
Octopus Labs announced their new FinTech accelerator in Aug 2016 to especially help start-ups build, and distribute products to their clients including financial advisors, retail customers and more. Out of the 80 start-ups that applied, they chose 5, including us, to accelerate over the next 3 months.
Taking advantage of this opportunity was a no-brainer for us because of the following reasons:
- They do NOT take any equity or have any fancy clauses in their term sheet;
- Provide us space at 33 Holborn;
- An in-house team to support us;
- “Access to the firm’s distribution channel of over 3,500 financial advisers and 60,000 retail customers.”;
- “may decide to invest in or ‘spin-in’ the start-ups”, and
- an opportunity to work closely with other quality FinTech start-ups (one of them is also a potential client for our API).
Who are Octopus Investments and Octopus Labs?
Octopus Investments may not been known widely outside the general financial community but they are a force to reckon with – £6bn under management, extensive network of clients, and a ventures arm that can boast of some significant exits in the recent past.
Octopus Labs is less than a year old and has already launched a disruptive P2P product called Octopus Choice. There are some very interesting things about Octopus Choice that we don’t usually see in traditional financial services products. It’s not your conventional P2P product; Octopus invests 5% of each loan that goes out, and in the case of a loan default, retailer consumers get their money back first which is not usually seen in financial services.
Week 1 at the accelerator
Everything has happened very quickly – applying for the accelerator, pitches to select the final 5, and moving into their offices – something that we nimble start-ups of course love. We moved into their offices on 10 Oct.
Octopus Investments does not seem like another financial services company or bank that is nervous about FinTech companies eating their pie. They seem to be looking at FinTech as an opportunity to grow the business, increase market share and expand into other areas. Also, their focus on customer and customer experiences is a good novelty to see in the financial services space.
The highlight of the week for us was a two hour discussion with Simon Rogerson, CEO and co-founder of Octopus Investments. As an entrepreneur, I’m always excited and interested to hear about the stories of other entrepreneurs, about successes but also about failures. He talked about the challenges and the opportunities in the spaces that they operate in but the most interesting part was a brief discussion about their journey as 20-something fund managers who wanted to disrupt the space almost 20 years back, and have today built a well regarded group with more than 500 employees.
Having been through an accelerator before, I’ve realised the mistakes I did which didn’t allow me to get the most of our team at Microsoft Accelerator. This time we’ll be more structured – we have identified the key challenges we want to address on the product, marketing and distribution, and business side. Moreover, we want to leverage everything offered by the labs – We’ve been assigned mentors that have a good mix of business and technology experience, access to different teams within Octopus Investments, and their external connections in asset and wealth management.
I’ve never been a suits person, and love the tech world where what you do is more important that what you wear. I was initially worried that I’ll have to start dressing up each morning heading to Octopus Investments, but guess what – the labs has more of a start-up feel to it; I’ll stick to my jeans and comfy shoes for now 🙂
Why is everyone so bullish on FinTech?
Here is my take on it