It takes roughly 10 years for Canadian startups to scale. Highline Beta is working towards cutting that time in half.
Highline Beta is a Toronto-based startup co-creation company that builds and funds new ventures alongside leading global enterprises. It unlocks assets and resources at global corporations, such as Anheuser-Busch InBev (AB InBev) and RBC, acting as a bridge connecting these companies to the startup ecosystem.
“We work alongside startup founders to support them through validating their earliest assumption. And a lot of startups fail because they don’t do that early work,” Lauren Robinson, general partner of Highline Beta told IT World Canada.
According to the company, traditional venture capital (VC) models don’t allow for enough capital to run the support network needed for entrepreneurs to succeed.
Highline Beta runs corporate accelerator programs and corporate co-creation programs where it works on the upfront validation and unique access into corporate partners. This allows the company to work alongside founders of startups at the earliest stage and before it even invests in them, in addition to supporting the founders as their respective startups grow and scale.
A recent study by the University of Toronto revealed that despite being ranked third in the world for the sums of venture capital invested per year, Canada ranks last in the world at turning these funds to unicorns.
Corporations are rethinking how to approach VCs in Canada, said Robinson.
“The number of corporate venture deals in Canada have increased to three times over the last couple of years. More and more fortune 500 companies are launching corporate venturing units and rethinking the traditional venture capital approach to really incorporate how to work specifically with startup companies that are disrupting their industries. They are also thinking through ways where they can partner alongside startups to solve some of those challenges,” she said.
Highline Beta works directly with corporate partners to help identify opportunities for growth and innovation.
Thereafter, with its funds, the company does two streams of investments where it can help corporate partners identify the in-market startups that solve those challenges or co-create alongside a corporate partners and entrepreneurs that it brings into the business.
Highline Beta has been driving this shift, and in 2020, Marcus Daniels, co-founder of Highline Beta, thinks investors will focus on more stable, simpler business models.
“At Highline Beta, we’ve always been extremely passionate about reimagining and innovating traditional venture capital models. Through our model of the corporate accelerators and co-creation, we really believe that there’s a huge opportunity for Canada to stand as a global player in terms of corporate innovation,” Robinson said.
For example, from the first RBC Reach Accelerator that Highline Beta worked on, Fidel, a U.K.-based startup, raised CA$23.83 million to let developers build on top of payment data from Visa, Mastercard and Amex.
The world’s largest brewer, AB InBEV, has also partnered with Highline Beta to create an in-house accelerator to attract the right start-ups to help them reach their 2025 sustainability goals around smart agriculture, water stewardship, circular packaging and climate action.
AB InBev launched the “100+ Sustainability Accelerator” by issuing ten challenge statements across a range of issues, including water stewardship, farmer productivity, product upcycling, responsible sourcing, green logistics and more. The goal was to solicit applications from startups that are solving key sustainability challenges with innovative solutions.
Collectively, these startups raised over CA$132.31 million in funding and CA$66.21 million in revenue.
When deciding which startups to invest in, a number of factors come into play, explained Robinson.
“We look at a combination of the team that’s running a startup, the product, the market, how much traction it has, what its business model is, and collectively, we look at startups that are coming through the two types of corporate programs that we run the corporate accelerator programs and the co-creation.”