- Muru-D only accelerator programme in the region that uses SAFE
- Focused on Southeast Asia and Australia for next three to four years
IN RECENT years, the Southeast Asian region has attracted many venture capitalists, angel investors and even accelerator programmes for startups based in the region. Telstra-backed accelerator muru-D Singapore is among the newer accelerator programmes aimed at helping startups in this part of the world.
Digital News Asia spoke to muru-D Singapore entrepreneur-in-residence Craig Dixon recently, who shared what makes the accelerator unique. “We give startups SGD75,000 up front so we don’t charge them any milestone requirements for that and we invest through Simple Agreement for Future Equity (SAFE),” he explains in a recent phone interview. (Note: SAFE is an agreement that provides investment to the company on a convertible note which converts to equity when the startup does its first post-programme qualifying raise at the valuation of that raise.)
As far as Dixon knows, they’re the only accelerator programme in Southeast Asia that uses SAFE. “We don’t take any equity upfront, so SAFE is an option for us to buy equity later. The SAFE that we use is uncapped; we don’t attach any valuation at the time and we also don’t cap it for when it converts to equity. And the reason that is important is because we can take much more mature startups into our programme.”
For example, a startup that enters their programme may have already raised Series-A funding with a S$10 million valuation and the SAFE will convert that the next round. And even if they raise a round of S$50 million, muru-D comes in with S$25 million, Dixon explains.
Dixon notes that in comparison, other programmes tend to have very strict investment policies; they give a specific valuation and take a specific equity percentage, and then they have milestone requirements or may charge fees for the programme.
“Also we do our programme in a six-month block, other accelerator programmes are typically 10 weeks or three months. We also take all the cohort participants to Silicon Valley on a guided trip,” he adds.
According to Dixon, muru-D tends to take a fair number of startups that have already graduated from a local accelerator programme and are looking to expand outside their home country-- not just regionally in Southeast Asia, but also globally. “We have partnerships around the globe such as 500 Startups, and a few others, so we have a fairly global reach with our network,” he says.
Choosing the right startups
On the criteria they use to select startups for the accelerator programme, Dixon shares that they have a list of five criteria used by their judging panel.
“First is the leadership: are they great founders with a well-thought-out business model that can become a regional or global business, number two is coachable, number three is are they a good fit for the cohort, number four is diversity and finally, social impact.”
How does the accelerator measure the success rate of its graduated startups? Dixon reckons many accelerator programmes struggle with how to benchmark themselves.
“We actually went through an exercise last year on how to do this internally, and I reached out to some of my contacts at Y-Combinator, 500 Startups and other globally recognised accelerator programmes. And it seems that the most common measurement is follow-up funding; and valuation coming in and going out, which is a good way to see the appreciation of the startup as a result of the programme.”
He shares that on the first measurement, their first cohort teams have raised S$3 million within 12 months of graduating the programme.
In addition, muru-D also has an alumni support programme, Dixon says. “We have monthly calls with our alumni, we pull in subject-matter experts such as the product manager for Airbnb talking about some of their best practices, answering questions.”
He explains that they have a portfolio manager based in San Francisco who manages the alumni programme. “A lot of the alumni come from the Singapore programme and they are in and out of Singapore. We do a lot of networking on behalf of the alumni. We also have an internal champion in our current cohort who is responsible for liaising with the alumni, we have an alumni for each cohort. We also facilitate meetings with investors for alumni.”
Going to the next level
With one cohort already graduated, Dixon was asked if any have taken their businesses to the next level. “It’s a bit hard to define what that is, but two startups from cohort one that are standouts are Apvera, and GroupStar (formerly PrecisionBit)."
Apvera is a cyber security firm that now has offices in Singapore and Hong Kong. The company raised S$1.7 million last July, and according to him, it has gained a lot of traction since graduating from the cohort. GroupStar, meanwhile, “has done an incredible job” of using the Telstra network to get customers in areas like banking and insurance.
“From the second cohort I’d like to highlight Amtiss, they have a mining equipment monitoring platform and has the number one oil and gas company from Indonesia as their customer.”
Commenting on the future plans for muru-D Singapore, Dixon says that the goal is to be the top accelerator programme in Southeast Asia. “I think we’ve made a lot of progress with that, after this cohort we’ll have about 30 startups that have graduated in 2017.
“One thing we’re very focused on is expanding to the surrounding countries, so as we roll out our alumni network in the surrounding countries such as Malaysia, Vietnam and Indonesia, we’re looking to forge more collaborations with partners on the ground.”
He shares that for the longer term, it’s kind of a challenge. “I can’t think beyond the next six to twelve months, really. I think it’s about becoming more of a global player and for the next three to four years we’re pretty much focused on Southeast Asia and Australia,” he concludes.
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