The initiative, involving Agrosuper, CCU, CMPC, Enel, Molymet and Pucobre, focuses on speeding up the validation cycle and scaling of solutions that startups offer the industry.
BMW, as a company, and Finland, as a country, were the two cases that inspired Sofofa Hub’s (Sofofa’s spinoff) new challenge, with the aim of strengthening and bringing the world of innovation closer to industry. This is Venture Client Sofofa Hub, an open innovation program that will be launched this Thursday by the organization, hand-in-hand with its six partner companies: Agrosuper, CCU, CMPC, Enel, Molymet and PuCobre.
Alan Garcia, Sofofa Hub’s executive director, explains that the venture client model consists of transforming companies into a kind of “venture client”, by supporting the growth of science- and technology-based firms, by contracting their products or services in early stages, with the aim of turning them into future suppliers.
In this case, he adds, the alliance’s six companies have made a move to adhere to this outreach model, since, on the one hand, it allows them to lighten the innovation load of their processes and/or businesses by simplifying and accelerating the validation and scaling cycle of the solutions offered by Chilean entrepreneurs. On the other hand, it is also a collaborative model since it not only focuses on the search or testing of technologies, but rather on the grounds for cooperation and in what the companies can learn from innovators, achieving a collective impact in the industry, and contributing to the country’s development.
A vision shared and confirmed by Rodrigo Arias, head of Open Innovation at Agrosuper.
“We are convinced that partnerships between startups and companies generate shared value and allow us to develop new competitive advantages and validate innovative business models,” says Arias, adding that since 2016 —year in which Agrosuper began its corporate venturing— more than 95% of his work with entrepreneurial ventures has taken place under the venture client model.
At a good time
Garcia explains that, for startups, venture clients are a good alternative to the current restrictive financing scenario by venture capital funds, which —at a global scale— are demanding more results and revenues versus exorbitant expansions. This, because through this model startups generate and demonstrate income by selling their product or service to a company, contributing to their growth and commercial reputation by presenting themselves as a more attractive bet for investors. Additionally, he adds, it allows innovators to finance their development without giving up part of their business, as is the case with venture capital.
“The most traditional way for an entrepreneur to grow is to sell its solutions, and to attract investors it must, additionally, have sales and demonstrate that it has retained good customers. But it’s not always easy to engage with a big company, and this is where this model contributes in reducing these barriers,” he explains.
Regarding Sofofa Hub’s program, he points out that it is focused on startups that already have a product or service that has been tested by a company. There will be six-month cycles (with one or two calls per year), where the alliance’s companies will post specific challenges on the website (www.ventureclient.cl), and although the process does not guarantee a solution for the company, or a client for those that are finally selected, the methodology does ensure that the challenges are linked to a real business problem and that there is a willingness to invest in the search, validation and scaling of an effective solution. Garcia also highlights the convening power that stems from a collaborative model.
The first call considers three challenges and the idea this year is to validate the model, to subsequently issue two calls in 2023. Regarding the number of startups, he explains that it will depend on each challenge and the submitted solutions, although the idea is that several of them participate, in one or more challenges, since there is no exclusivity.
“The main purpose is not to find an entrepreneur and submit a pilot, but rather to achieve a long-term relationship between the parties and that the project is scaled”.