Telef贸nica’s startup accelerator Wayra to launch in the UK

Telef贸nica’s startup accelerator Wayra to launch in the UK

After launching across Latin America, Telef贸nica鈥榮 startup accelerator Wayra is now expanding to Europe, the Spanish telecommunications company has announced.

The expansion has already started; a Wayra Academy has recently opened in Madrid, and the accelerator聽will soon disembark in London.

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To explain聽where Wayra comes from and what it has achieved, Telef贸nica invited a British delegation to visit Wayra Academy in Madrid and meet its key executives.

The vision behind Wayra

At the moment, ten startups are going through Wayra鈥檚 acceleration cycle in Madrid. While it is obvious that some of these projects could directly interest Telef贸nica, Wayra鈥檚 organizers make it clear that there is no obligation for the startups to sell their projects to Telef贸nica 鈥 or for the group to acquire them.

Despite its background, Wayra works as a traditional accelerator, asking for an average 10% equity in exchange for its investment and services 鈥 which is quite low, considering it includes seed capital, mentoring and a co-working space.

That makes Wayra quite unique in the corporate world 鈥 but as Wayra鈥檚 global manager聽Gonzalo Mart铆n-Villa聽says: 鈥淲e didn鈥檛 ask for permission.鈥 What we now know is Telef贸nica鈥檚 accelerator actually started as a small project a few executives were working on quite independently.

The initial impulse came from聽Jos茅 Mar铆a 脕lvarez-Pallete, who explained the British visitors how he became 鈥淲ayra鈥檚 architect鈥 after more than a decade working at Telef贸nica. Then CEO of Telef贸nica Latin America (and now CEO of Telef贸nica Europe), he visited Microsoft and was introduced to Project Natal聽(which gave birth to Kinect). When he asked where its name came from, he was told it was a tribute to Brazil 鈥 the home country of Alex Kipman, who incubated the project.

At that point, 脕lvarez-Pallete realized something was wrong with this brain drain, and started thinking: what would it take for Latin America to retain its top talent? This is how the idea for Wayra emerged, as a way to detect entrepreneurs and help them develop their ideas locally.

Obviously, this is more than philanthropy, and Telef贸nica can also gain from it, beginning with its image. Still, this is not necessarily an easy idea to pitch to such a large group, and the small team behind Wayra still seems impressed it only took a few months to make it a reality in so many countries.

Beyond ROI: why Wayra is also a startup

This required doing things very differently from the way things are usually run in big corporations, and Wayra鈥檚 team is visibly thankful for the freedom Telef贸nica gave them 鈥 one of the elements that won the most praise from their British visitors. According to聽Mart铆n-Villa, Wayra is 鈥榤anaged in startup mode, with a small staff, which helps it to be quick and flexible.鈥

This goes down to many single details. As 脕lvarez-Pallete points out,聽Wayra鈥檚 name came from the R&D team, not from a fancy branding agency (Wayra means 鈥渨ind鈥 in quechua). It also meant convincing Telef贸nica that it would have to do things differently, starting with its launch. While the group鈥檚 reflex was to approach finance newspapers, Wayra鈥檚 team knew it had to use other tools, such as social media, and reach out to business schools and entrepreneurs.

Entrepreneurs themselves were skeptical at first, as they were worried they鈥檇 lose control of their ideas to Telef贸nica. Wayra decided to build a transparent and entrepreneur-friendly approach, and it seems to have managed to build the trust it needed 鈥 it has received almost 6,000 projects so far.

The program also plans to expand its scope based on feedback it received. 鈥淧eople said Wayra was made for Steve Jobs, but not for Steve Wozniak,鈥澛犆乴varez-Pallete recalls. As a result, the accelerator is planning to launch a selection process for tech talent and bring these individual to Wayra Academies, where they will be able to cooperate. After all, the 鈥渄rama of talented engineers who have to migrate鈥 is what inspired Wayra in the first place.

Building successful companies

While Wayra鈥檚 team is sincerely humble, making clear it learned a lot along the process, it is obvious it has big ambitions.聽According to Wayra Europe鈥檚 director of new ventures聽Simon Devonshire, 鈥淲ayra wants to be the best incubator on earth 鈥 not only in terms of quantity, but also of project quality, and of acceleration quality.鈥

鈥淲e want to give our selected projects聽the support they need to become multi-million companies,鈥 Devonshire explained.聽Launching Wayra in the UK means it will face much more competition, since entrepreneurs also have access to other accelerators, but Devonshire is confident about Wayra鈥檚 assets, starting with Telef贸nica鈥檚 huge scale 鈥 it has around 300m customers around the world.

While it remains to be seen how exactly startups can fully tap into this resource, working with Telef贸nica and its different subsidiaries is likely to facilitate their access to customers. Ultimately, Wayra wants to help them make money they wouldn鈥檛 have made without the group.

A long-term plan

It may also make it easier for them to find follow-on funding; according to聽Mart铆n-Villa, several of Wayra鈥檚 startups in Colombia have found additional investment. There鈥檚 more coming, from Telef贸nica聽itself: the company is grouping with other investors to create a new fund called Amerigo VC. Once approved, it will start operating in Colombia, followed by Spain, with the ambition to deploy across Latin America and Europe.

Again, Amerigo VC won鈥檛 have any exclusivity on Wayra鈥檚 projects, and these will be presented to other investors during the Demo Day that marks the end of their acceleration cycle.

If you wonder why this makes sense for Telef贸nica, it is important to keep in mind the company鈥檚 DNA, which implies to invest large amounts in infrastructure, and be prepared to wait for results,聽脕lvarez-Pallete notes.

This is one the main reasons why the team decided to build Wayra as a network; running interconnected operations in several countries will be its force, and an important asset for participants. It also means the program can boast previous successes, such as its recent partnership with MIT, when it launches in a new place.

Its next stop will be Barcelona, where a WayraWeek will take place before the Mobile World Congress; according to the team, this is an essential phase for Wayra to make its final selection, as startups can look different on paper. After Barcelona, Wayra鈥檚 goal is to cover the rest of Europe, starting with London.

London, Telefonica鈥檚 new digital pole

London has become increasingly important for the Spanish group. As you may remember, Telef贸nica has recently established a digital division,聽Telefonica Digital, which is boldly based in London. According to the CEO of the new entity,聽Matthew Key, Telef贸nica was the first telco to聽have a dedicated digital structure.

Moving into that space was an absolute need to make the most of the telcos鈥 existing customer base and distribution capacities, he explained. At the same time, telcos aren鈥檛 known for fast decision-making, hence the decision to set Telef贸nica鈥檚 operating services (despite the fact that one will not succeed without the other, Key said).

While Wayra preceded this move, the coherence between the accelerator and Telef贸nica Digital is quite clear. Aside from Wayra and several internal divisions, such as Cloud and e-Health, Telef贸nica Digital also oversees Internet companies that the group recently acquired, its global partnerships with companies such as Apple, Facebook and Google, and its two venture capital funds (one that already exists in Silicon Valley, and the upcoming Amerigo VC).

Both also share the same vision; as Key points out, becoming a digital entrepreneur has never been so easy, which means that entrepreneurs will come from all parts of society. Innovation is also becoming a global phenomenon, that goes way beyond Silicon Valley.

When Wayra launched, it made it clear its ambition is to create small Silicon Valleys 鈥 with the difference that they will all be interconnected. Wayra wants to be an ecosystem, and capillarity will be the key. However, it is crucial not to get lost in the big picture. Says 脕lvarez-Pallete:聽鈥淭he success of Wayra is going to be the success of its participants.鈥

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