HSH Nordbank and the Next Commerce Accerlerator
Why it is profitable for enterprises to occupy themselves with small Start-ups.
August 2017 – Hamburg is Germany's commercial metropolis. For this to remain the case in the disruptive age of globalization and digitalization, established trading companies must continue to develop. The crucial impetus for this process is provided by start-ups. With the founding of the Next Commerce Accelerator, HSH Nordbank and their partners now want to help support the digital change in commerce. The joint venture brings together start-ups, established businesses and experts, to the benefit of the participants and the site Hamburg.
At some 110 billion euros, Hamburg's "Gross Domestic Product"– the sum of all goods and services produced there – is more significant than that of whole countries like Serbia or Croatia. Above all, the major trading companies steeped in history, such as Edeka, Otto, Helm, Cremer, Tchibo and Hawesko, have made the Free and Hanseatic City of Hamburg economically strong and significant, and they continue to shape it.
However, this justifiably satisfied glance in the rear-view mirror of economic history should not draw attention away from the future. Heraclitus' aphorism bears particular relevance for commercial enterprises: "The only constant is change." New competitors, domestic and foreign – usually digital speedboats with clever heads on board, breathtaking technology, plenty of daring and low-cost structures – are turning up in the waterways of the great trading tankers. Is there a threat of collision?
Not if it is up to HSH Nordbank. They and their partners in the freshly launched project Next Commerce Accelerator (NCA) are geared towards cooperation rather than confrontation. Senator for Economy Frank Horch also sees great potential in the Accelerator concept. "Hamburg is the ideal location for the topic of e-commerce. Here, around 10,000 commercial enterprises encounter market leading service providers like SinnerSchrader, pilot, PublicisPixelpark and Novomind. This, in addition to a dynamic start-up ecosystem with more than 1000 firms being founded per year in the field of IT and e-commerce."
Initial question: How far does the statement "We feel set for the transformation." apply for your company?
Source: Bundesdruckerei GmbH/Bitkom Research, 2016
In order to increase these numbers, HSH Nordbank and Hamburger Sparkasse (Haspa) have created the NCA: a start-up accelerator for innovative business models. The NCA supports future start-ups and founder-teams from throughout Europe in the development of digital, innovative e-commerce business models. "Alongside equity capital from through to 50,000 Euros, the project offers access to potential clients and business partners, a customized training and coaching program and attractive premises in co-working spaces", explains Patrick Miljes. HSH Nordbank's Division Manager for Corporate Clients is one the of key initiators of the project.
In return for help in the early stages of their enterprise, the start-ups give between three and ten percent of the company's shares over to the NCA-shareholders. The new partners also come closer geographically. "The start-ups transfer their major professional activities to Hamburg for a minimum of six months to really expedite the growth of their business there under ideal conditions," says Miljes. "Our goal is for the majority of the young firms to then take up permanent residence in Hamburg– in line with the motto 'Here to stay'." Those who wish may spend an additional month as a young founder at a partner accelerator in Shanghai.
Source: KPMG Global Pulse Insights Survey - Q2/2016
Currently, the management team and a group of ten investors have been assembled for the accelerator. "We are reaching out to established, resident businesses in Hamburg that want to cooperate with the participating start-ups and open up market access for them. "The trading companies profit from the know-how of the young enterprises and receive new stimulation for their own business", said Miljes, describing the win-win idea behind the project NCA. "Where else can you obtain presentations of 350 to 500 use cases for your own company“, asks the Division Manager for Corporate Clients at HSH Nordbank.
The coaching of the young companies is being undertaken by a mentor group of around 200 people, made up of entrepreneurs, specialists and representatives from large businesses. The first "class" with five start-ups is due start in Hamburg in just a few months. A new class then will follow every year. The creator's long-term goal: "We want to rise a position among the top three accelerators in the area of e-commerce in Europe and bring the continent's best start-ups to Hamburg", states Miljes, outlining the goal.
Big and small, young and old, start-ups and investors will profit from one another in equal measure. "With more than 5,000 commercial clients combined, Haspa and HSH Nordbank are ideal shareholders", maintains Bodo Kräter from Skillnet. The consultancy is supporting the shareholders during the development of the NCA. With the development of the "Next Media Accelerator" from the German Press Agency (DPA), likewise supported by Skillnet, millions in follow-on financing from European and American investors has already been realized.
The participating banks also profit. First of all, by helping their long-time client businesses become better suited for the digital future – and thus to benefit from the intensification of the client relationship. Secondly, they themselves receive stimulation for new products and offers. "The financing business is also rapidly changing in the digital age", Miljes stresses. As machines and warehouses as classic securities are increasingly being replaced by software which is difficult to lend and clever ideas, the credit business, for example, is facing a fundamental change. Examples include financial models such as pay-as-you-earn, with which repayment becomes less certain: revenue from leasing goods, for example, accrues only if revenue is generated from the object itself. "This innovative form of financing necessitates new thinking from businesses such as banks, above all with regards to risk management. Shrewd start-ups can definitely help us here too." Miljes is already looking forward to the exchange with future founders and new Hamburg residents.