When Erik Abrahamsson was working in his university bedroom, he probably didn’t realise that 12 months later he would have $400,000 seed investment, join Club Workspace and then jump to an accelerator to turbo-charge his insurance-tech business, Digital Fineprint.
Same with Pyry Takala, who was in the midst of his PhD in machine learning before applying on a whim to Entrepreneur First, a “pre-team, pre-idea” accelerator based at Club Workspace Leathermarket – now based in Workspace’s Biscuit Factory in Bermondsey – in the autumn of 2015. A year later he also has significant investment and is on another accelerator run by Microsoft, developing deep machine learning with a team of nine. Deep learning – a bit of a buzzword – is, in very basic terms, a way of helping computers decipher (and thus use) natural language through algorithms.
Accelerators are particularly popular in the tech sector, where development can happen very quickly – it’s not like building a car or developing a vaccine. These schemes allow teams to work full-time on their project and usually offer some financial support too, often in return for equity. The term incubator is also bandied about, but these mostly don’t entail funding.
“Microsoft Ventures is particularly popular because they don’t ask for equity,” Takala, the founder of machine-learning start-up True AI, tells HomeWork. “They only accept 2% of applicants.” The team had to pitch, prepare a pitch deck and supply references – Entrepreneur First was good practice.
Born and educated in Finland, Takala initially graduated in business and worked at McKinsey & Co and Goldman Sachs before deciding to return to academia to study deep learning. During the course, he studied machine-learning research at Amazon in Seattle.
He realised that team sizes that could deal with the amount of data needed were not to be found in universities, but in commercial initiatives. And so, after a summer at Amazon, he jumped ship to Entrepreneur First, fully intending to quit and return to his lectures if it wasn’t for him. Within a few weeks, he’d met his co-founder and embarked on the idea that would become True AI. A machine-learning plug-in, it gives reply suggestions to customer-service operators on email or chat, or any other text-based customer-relations tool. Choosing from a series of options rather than typing out answers cuts reply times by up to a fifth, estimates Takala. After Entrepreneur First, True AI moved into Club Kennington as it was good value for money and they lived close by.
Disrupting traditional industries
Digital Fineprint is also a Kennington start-up. A former Twitter employee, Abrahamsson founded the company during his MBA at Oxford University with Austin Wellbelove, now the company’s Chief Technology Officer. They soon recruited James Clarke as Head of Sales who had a decade of travel-insurance experience under his belt.
“Social media is used in all industries but only 10% of insurance policies are bought online,” says Abrahamsson. Digital Fineprint started off integrating social media profiles into online insurance forms, saving customers the hassle of manually filling in all their personal details.
We help customers understand their insurance needs and we help insurers meet those needs.”
James Clarke, Digital Fineprint
They initially set up at Google Campus, but the cramped working conditions meant that they had to meet investors around the main coffee bar. Despite noisy conditions, the investors present eventually put money in and Sam Evans, Managing Director of Eos Venture Partners, led the seed round. The investment enabled them to hire more staff and move into Club Kennington. The company has now been accepted as one of the first insurtech start-ups on Accenture’s accelerator scheme, a programme that usually supports more mature businesses.
Accelerating the start-up journey
Accelerators are a relatively recent phenomenon that have picked up in popularity as the start-up world has rocketed. The US was a frontrunner, with Y Combinator one of the first and most famous. Seedcamp was set up in the UK in 2007, and since then there have been Telefonica’s Wayra, Techstars and Founders Factory, among others. Specialist accelerators have also thrived – Kitchenette for food businesses, Pi Labs for property, and FrontRow for fashion.
Though perhaps not part of the initial trajectory, joining an accelerator has become part of both businesses’ start-up plan. True AI wants to build its first product demo, establish a team and grow it in the six months that it is on the Microsoft Ventures accelerator programme, based near Liverpool Street. It also gives the team breathing space so they don’t have to concentrate on funding until the end of the year, and could move back to Workspace in the summer.
Their plans are ambitious; they want to improve customer conversations in all industries – be that tax and government services (they are in talks with the Finnish Tax Administration) – insurance, retail or even journalism. “I was talking to some grey-haired execs at BMW,” says Takala, “who were saying that most of their customers call them. But their customers are usually above the age of 50. The next generation of BMW drivers are used to communicating by text.”
The Accenture accelerator programme has also been fruitful for Digital Fineprint. It has “exploded our schedule,” Abrahamsson grins. They’ve had introductions to Lloyds, RSA Insurance Group and others, and are planning on getting more clients in addition to Allianz and Hiscox.
Things are moving fast. Abrahamsson got a call from San Francisco-based Plug and Play, the global innovation platform for start-ups, corporations and investors. They wanted to meet in two days’ time. “They assumed we were a Silicon Valley start-up,” Abrahamsson laughs. “It’s a good sign!” He’s going out to meet them now the accelerator programme is over. And what then? They’ve just moved in to Workspace Metal Box.
Find out more about Club Workspace or The Metal Box Factory or get in touch to book a tour here.