Startup Avalanche - Competition for Startups that Speak Business… and Solve Real Problems
In Europe, when people think of social impact, they often think of nonprofits. Although nonprofits play a critical and important role in society, there is also an important role for for-profit businesses to play in social impact.
Consigning social impact to nonprofits is an easy way to absolve the rest of our economy from creating higher purposes and values beyond money. Besides letting our most powerful economic actors off the hook, it also limits the potential scale of social impact. Most nonprofits have to spend an inordinate amount of their time chasing resources from donors in order to serve constituents. Besides the conflicting interests that donors and constituents often have, it presents an ongoing frustration for nonprofit leadership and teams. Which is another reason why stigma related to making money while solving real problems needs to go away. And this is where Startup Avalanche comes in.
Startup Avalanche, which is a partnership between Techsylvania and Risky Business, has always sought to be more than just a startup competition. Avalanche strives to find “diamonds in the rough” for investors–that is, startups that have high potential but lack the polish, connections, or geographic advantage to be brought to the attention of investors.
“Besides providing weeks of support to selected startups over Skype, we work for them for almost a week in an in-person bootcamp in Cluj-Napoca. This bootcamp focuses on providing individualized support on pitches, product, strategy, term sheets, and more. Besides the sourcing strategy and support we provide, we’ve always sought to offer this platform to startups that had the potential to do more than just make money.” – explains Jennifer Austin, co-founder of Risky Business.
In 2019, the prize at Startup Avalanche was a EUR 125,000 investment. The winner demonstrated well this thesis that you can do well by doing good. Patch.ai is an Italian startup that is improving patient engagement among clinical trial participants. Why is this important? All the medicines and treatments that improve our lives must go through many clinical trials before they can reach the market. Patients who join clinical trials usually have a few motivations. Perhaps they have a condition for which no other treatment has worked yet. Sometimes there are financial incentives. Or they have a condition for which there is no cure and they participate in clinical trials in the hope that their contribution will help save others in the future from their suffering. Regardless of their motives, patients enrolled in clinical trials should be able to complete the required reporting easily and with dignity. Previous methods of written reporting and tele-reporting often feel impersonal and have a low reporting rate. Patch.ai is a mobile app that engages with patients in a friendly, but persistent manner. This drastically improves data collection, which is very important because low patient reporting rates can invalidate a trial and slow the speed of a treatment to the patients that need it. It also improves patient experience, which is important because without these patients and their contributions, the treatment wouldn’t have a chance to make it to market. Patch.ai has raised EUR 650k so far and will be raising again soon to scale. They are not a nonprofit and are revenue positive. But without a doubt, the social impact this startup can have is immense.
Out of the 16 startups from all around the world that presented at Avalanche 2019, quite a few are making substantial impact. These include:
- Medicsen, a Spanish startup that provides a smart system for managing diabetes, which dramatically improves the quality of life of those affected by this disease.
- Stressless, a Romanian startup, is a wearable device that helps parents and other care providers better address the needs of children diagnosed with ADHD.
- Better nature, a startup from UK, provides a great alternative to meat, without compromising on taste
- Poligy, a German startup, develops modules that provide the customer with green energy and heat for his house the whole year
“Any time you build a platform to raise companies and people up, it is important to decide who you want to raise. Even if Startup Avalanche is focused on high potential investments, we believe this is not mutually exclusive to supporting startups that have social impact potential as well.” as explained by Vlad Curca, co-founder of Techsylvania
One of the biggest tech events in CEE, Techsylvania brings together more than 2000 entrepreneurs, investors, tech specialists, community leaders, students, professionals and many more for workshops, keynote speeches, satellite events, hackathons and great conversations about putting technology to good use. Risky Business is the first fully private venture capital fund, bringing together investors and business leaders from all over Romania and not only. Besides investing, Risky Business provides a wide range of programs dedicated to developing entrepreneurship in the area.
Based on this experience, Jennifer explains more about what entrepreneurship should really be: “Too many startups these days are focused on solving faux-problems. Yes, there is a market for people who for some reason got a dog but don’t want to take the time to walk it. And perhaps there is a market for yet another food delivery app or photo-sharing platform that has some killer features. Or a service that ships snow to you. But there’s a much larger market of people who don’t have access to basic medical information, let alone basic quality healthcare. There’s a large and growing market of people who don’t have access to elder care. Millions don’t have clean water (even people in the USA)! Billions of people don’t have electricity. Our ozone layer is depleting. Almost 2 billion people don’t have a bank account, leaving them vulnerable to exploitation and limiting their opportunities. More problems, more market opportunity for the savvy entrepreneur. And maybe your team isn’t the one to solve these huge problems. Maybe your startup is “just” focused on making clinical trials more humane for patients and more efficient for advancing medical treatments to market. But quite frankly, if you aren’t making the world at least a little better, you’re just in the way. These are not just the free-flowing ravings of a hippie displaced in time or the feel-good motto of an event organizer. We invested our own funds money in Patch.ai. Even if these ideas seem new and radical for Eastern Europe, it isn’t an original thesis.”
Speaking of impact investing at a forum at MIT, Liqian Ma, from Cambridge Associates, a financial advisory firm with more than $30 billion under management and almost $400 billion invested under advisement, commented, “It’s one of the fastest-growing areas of the investment business. “The goal is to invest in products and services that serve a need, address real challenges, and also can and deserve to be profitable.” Cambridge Associates has been making an absurd amount of money since 1973….if you can’t take our word for it, take theirs.
Find our more about this startup here.