Matchmaking startups with a Large Corporate — The Union Bank Startup Connect story
A part of me feels like Hitch. You know the Will Smith character from the movie of the same name who helped men date the women of their dreams. We did the same for 12 Nigerian startups and Union Bank. Got them to date with possibility of a deeper engagement. Here’s how…
On the 22nd of September, 2017, we (CcHub) took 12 top Nigerian tech startups to pitch at the headquarters of Union Bank, Nigeria’s 2nd oldest bank.
This was the climax of a programme we are running, as part of Union Bank’s 100 anniversary celebration, called Startup Connect. The aim, to connect the bank to innovative & promising startups they can partner with to further their innovation agenda while helping the startups scale.
The Finalists
The 12 startups had been shortlisted from 720 startups that had responded to our call for ventures.
Initially we requested for startups at the intersection of Digital tech and Agriculture, Education or Finance but eventually opened up the field.
A key criteria was that the startups had achieved product-market fit and some level of traction.
The aim was then to define a direct connection with the strategy of the bank and for the top three startups with the best strategic fit (after pitching) to be selected for immediate on-boarding.
The twelve startups shortlisted were (in alphabetical order):
Pitch Preparation
All 12 startups were invited to a pitch preparation workshop 2 days before the final pitch at Union Bank. The aim was to make sure they put their best foot forward when facing senior executives of the bank who were all scheduled to attend the main pitch event.
Members of Union Bank’s Innovation & Strategy Unit also attended the Pitch Prep to help the startups align their offer from the startups with the bank’s strategy.
Mapping the Partnerships
Before we listened to the pitches, I had the startups clarify what offering they were proposing to the bank.
The Partnership Canvas, my adaptation of the popular Business Model Canvas, was taken for a spin. All 12 startups used it to clarify:
I. Which group within the Union Bank ecosystem they were proposing value to and what exactly the value was
ii. How their proposition fit into the bank’s strategy (short & long term) with respect to the segment of the ecosystem they are providing value for
iii. What the unique edge of their offering was and how it would be delivered
iv. The value they expected to receive from the bank in exchange
v. What they would do everyday to deliver the partnership
vi. Which units in the bank they expected to interface with to deliver this value
vii. The key numbers that would be used to measure if the partnership was succeeding
viii. What it would cost to deliver this value and who would pay
The aim of going through the offering in this much details was for the startups to be clear about the value they were bringing to the partnership with the bank. The basis of engagement has to be value exchange. More importantly, we want them to have through through every aspect of how how the partnership might work ahead of any questions asked during the pitch.
All 12 startups had the opportunity to fill in the canvas with review and coaching by the CcHub team. When they were done, they given time to integrate the output into their pitch deck in the partnership offering section.
No pitch deck format had been given to the startups in advance (we will do this differently next time) because we expected all the startups to have standard pitch decks. We asked that they make the offering to the bank in 1–3 slides and to focus on only one offering.
Things to Note
A few observations which we addressed when we heard the startups pitch (5 minutes)
- The problem you solve and your value proposition has to be clear, straight to the point and logical. The longer you spend explaining it, the more likely it is none of these things.
- Your business and pricing model has to be clear and logical. The more complex is, the harder it is to believe
- Offer ONE thing. This can’t be emphasised enough. A number of the startups had tons of offerings longer than an a la carte menu, hoping the partner would choose the one they wanted. WRONG MOVE!!! What this communicates is you have not done your homework about the partner to know what their pain point is that you want to help them address. The better approach is to propose one specific engagement as the hook which you can then build the relationship from. Your other offerings are things you can propose after you have a relationship. Proposing them upfront will only serve to distract and confuse. Through the pitch prep, we helped the startups narrow down to that one offering.
- Tie your offering to a very clear problem that the bank is facing with a very specific part of its ecosystem. Don’t try to be all things to all men. Once you tie your offering to a clear problem, it is easy for the executives listening to pinpoint which part of the business you should be working with. Thus you have your way in
- Pace yourself during the pitch. You only have 5 minutes. You don’t want to spend four and half minutes talking about your self and only 30 seconds talking about the offering. Front load the gist about your startup in two to two and a half minutes tops so can spend more time exploring the details of your one offering.
All 12 startups were listened to and all given input to improve their pitch decks, their offerings and their pitching. Each had its own flaws which were spotted and corrected. The work was then left to the teams to complete their decks with one day to spare ahead of the pitch.
The Final Pitch
Pitch day came and we had more than 40 employees of the bank in the room including a significant presentation of the very senior management.
The Heads of Retail, Transformation, Corporate Strategy, Communications and Technology were present as well as senior manager from all other units and representation from the CEOs office.
You could tell that the bank took the pitch exercise seriously. They were smack in the middle of a rights issue, so very very busy time at the bank, yet these senior executive took more than 4 hours out of their day to listen to the pitches.
Each pitch lasted for 5 minutes followed by 10minutes of Q&A.
The process was great as we could see the difference the Pitch Prep session had on the presentation of some of the startups. Their pitches were tighter and straight to the point. A lot of the questions from the bank staff mirrored what we had told the startups to expect.
Those startups that took our feedback to heart and reflected it in their pitches left the stage smiling. Those that didn’t had a torrid time as we had predicted.
But even more the pitches created a positive image in the pitches created a positive image in the mind of the bank staff present that there was merit in working with startups to advance the corporate agenda.
Decision Time
After the last pitch was done, the senior executives conferred to determine the startups they would work with. I was a part of that conversation. The conversation was really interesting as it reflected the priorities of the bank as well as the impression the startups had left.
Remember, I said the aim was to pick 3 startups for the bank to work with. The first feedback was that the bank wanted to work with more than just the 3 startups now.
Having seen all 12 well drilled startups with such immense potential, they wanted to take their shot with more than just 3. Big WIN for the startup scene!
Upon review of the startups, we then looked at which part of the broad system the startups could engage with and who would drive the engagement from the bank’s side. We looked at how the startup’s offer fit with the bank’s short and long term strategy and we looked at how quickly a deal could be signed.
The almighty “exclusivity” question came up and agreement was that there would be a time-limited exclusive deal after which the startup could open the engagement to other players.
We agreed to pick the top 3 startups around which engagement would be accelerated facilitated by CcHub. We also identified 7 additional startups with whom partnership conversations would be progressed.
So we came with 12 startups and potentially 10 were getting deals. Not bad as far as metrics go.
The top 3 startups, with whom collaboration is DEFINITELY happening, were:
- Accounteer
- DIYLaw
- Max.ng
The other startup being considered for collaboration were Edves, Riby, Stutern, SureGifts, Lusy, Hotels.ng and Taja.
The startups selected had compelling offerings that provided value-add to the bank’s external stakeholders (customers) as well as internal stakeholders (employees)
The next steps was to make the connection between the startups and the relevant parts of the Union Bank business for integration to commence with CcHub as an independent arbiter ensuring progress is made.
Everyone WINS
At the end of the day, the process and the emerging partnerships are providing WINS for everyone.
A WIN for the bank who can leverage the startups to provide a better service to its customers as a means of differentiation as well as to grow market share.
A WIN for the startups who can rapidly grow their user base by tapping into the banks more than 3.7 million customers and locations in all 36 states and Abuja as well as accessing free publicity through the bank’s marketing war chest.
A WIN for the bank’s customers and employees who access value-added services to meet their needs beyond financial interaction with the bank.
A WIN for the Nigerian tech ecosystem as this goes to prove we are building value-based businesses capable of engaging with large corporates to meet the needs of Nigerian customers in a profitable way. This is a first step to creating our own unicorns.
A WIN for the Nigerian economy as the result of this collaboration is bigger businesses that can contribute to GDP and the tax base of Nigeria sustainably
On the whole, it’s been a pleasure mid-wifing this experience and we can’t wait to do it again with another set of startups and another large corporation in Nigeria.
Exits are one of banes of our tech ecosystem for potential investors. Large corporates are a potential investor in Nigeria startups and we know that partnerships like these take us one step closer to very interesting mergers and acquisitions.
That day is ever closer now.
