Telefonica flashes cash, jangles office keys to lure UK startups
They're only in it for the money
Telefonica will provide offices on Tottenham Court Road to 20 startups, along with funding of up to €50,000 (£41.8k), pushing entrepreneurs to develop ideas, but mostly to make more money.
The project is called Wayra, and follows similar efforts in Madrid and Barcelona. Telefonica (owners of the O2 band) will provide desk space in the middle of London, lots of support and cash, in exchange for first refusal on products developed and a percentage share in the resulting company.
That share won't be more than ten per cent, but it is the primary way Telefonica intends to make money out of the project. First refusal isn't exclusive, so companies coming out of the Wayra Academy (as Telefonica likes to call it) will be able to sell their products to anyone, and it seems a sensible way of turning an idea into a reality.
Wayra even has a video featuring those hand-drawn graphics which are so popular with the kids these days:
The selection process is a bit Dragon's Den: the initial submissions are hacked down to a shortlist of 30 and each selected team gets to make a ten-minute pitch to a panel of judges who will no doubt drag out their decisions for dramatic effect. But that's got to be better than trying to catch eyes at First Tuesday events, or desperately needling friends and relatives for introductions to those who might know someone, or know someone who knows someone.
Successful applicants get to stay at the Wayra Academy for six months, with the possibility of another six months, during which they'll get help with logistics and access to the right people. After that Telefonica says it will help them look for another sugar daddy and a place to hang out, but ultimately the teams will have to find their own way in the world or call it a day.
Telefonica is betting enough of them will make it to pay back its investment. The company isn't doing this for the good of the British economy, unlike Tech City, the Silicon Roundabout quango that has pissed at least £1m of our money on trying to achieve much the same thing with disappointing results.
Tech City claims to be on a larger scale (Silicon Roundabout stretches in all directions), but in a few years it will be interesting to compare the success rates of the two.
Wayra is open to anyone with an idea and an age greater than 18, the first round of submissions have to be in by April 22. ®