German Startups and Corporates Collaboration Cases
Cooperation between technology start-ups and large corporates is claimed to be the key for fostering innovation in Europe by the World Economic Forum’s System Initiative on Shaping the Future of Digital Economy in 2018. Enrica Sighinolfi, Co-Chair of WEF Global Shapers Community, considers such partnerships the way forward for the Fourth Industrial Revolution to be sustainable in the long term.
While we often hear about the significance of such collaboration, there is always a lack of real examples that could illustrate how exactly is it profitable for both sides. In this article, we will try to fill in this gap and go through some of the cases of partnerships between German startups and established companies in the last few years. In this text, we will focus exclusively on the independent collaborations without considering incubation or acceleration which it could be a topic for a different article.
WHY DO CORPORATES COOPERATE WITH STARTUPS?
Corporates must innovate if they want to stay competitive in the future. Yet, digital disruption is not achieved easily from within, considering the usual inflexibility of the most processes in large established companies. This is where external innovators enter the game.
MasterCard Deutschland and solarisBank have started their partnership in October 2016 to drive innovation in digital banking. Both companies develop banking modules for solarisBank that enables businesses to offer financial services. The startup now operates at Mastercard’s highest issuer level, with access to its entire product portfolio. This was a big step for Mastercard towards its digitalization plan: the company wants to make payments function exclusively via smartphones, wearables or the Internet of Things.
A month later, Blink has partnered with one of the world’s leading reinsurers Munich RE to create the first real-time resolution flight interruption insurance. In case of a flight cancellation, the company provides its customers with a range of flight alternatives with no extra cost. By such partnership, the company ensured to provide the most innovative solutions for its customers and gained a competitive advantage. However, the startup has been acquired by CPP Group, the leading British insurer, in 2017.
Expanding products and services
The speed of execution, flexibility and commitment to innovation are known as the key features of the startups. Process-driven established corporates may improve and expand their services benefiting from the technologies provided by startups that tend to adapt and customize solutions more easily.
Berlin-based startup HelloFresh and Thermomix (Vorwerk Group) claim to complement each other in their mission of getting more people cooking fresh food at home: in May 2016 HelloFresh has released a set of deliverables based on recipes specifically designed for Thermomix. A few months later the startup made cooking even easier by integrating its app with Home Connect smart kitchen produced by Bosch.
The mutual goal of global online payment service provider PayU and Kreditech, a fintech company from Hamburg, is to simplify access to credit services. Their cooperation will bring Kreditech’s innovative credit services to PayU’s customers all around the world.
Leonardo Hotels now offers its clients a wider range of services due to a partnership with GetYourGuide – now the guests can book the local entertainment activities together with the hotels. In return, the startup gains access to a large group of customers. The same effect has been achieved by its partnership with a German-based multinational travel company TUI in 2012.
In the end of 2017, The German Credit Bank, ING-DiBa, PSD Bank Hannover and N26 have started to collaborate with the Berlin-based startup Clark. Due to this cooperation, the banks now provide their clients with an immediate and effortless access to a digital individualized insurance management system.
Improving the internal processes
BASF, the German leading chemical supplier to the automotive industry, managed to make its deliveries and data flow more transparent by involving the startups Quantoz and Ahrma using blockchain technologies.
WHY DO STARTUPS COOPERATE WITH CORPORATES?
Probably the most significant benefit for startups to cooperate with corporates is the access to their large customers base. The most notable example here could be Delivery Hero with its multiple partnerships with all the major food providers in Germany, including restaurants and fast-food chains (AmRest Group and KFC Deutschland) and the biggest manufacturers and retailers (such as The Coca-Cola Group). The leading Berlin-based food delivery marketplace has achieved a growth boost triggered by the integration to the companies that provide products with an everyday use for the vast majority all over the world.
In most cases, such cooperation is crucial for the development of the entire product. The travel metasearch engine GoEuro ran it expansion first over the Europe and later over the world. Starting in Berlin, it has partnered with the local transport providers, such as Berlin Shuttle, berlinlinienbus, and later grew German-wide by integrating with Deutsche Bahn, Flixbus, airberlin and other transport companies and search engines. Without such integration and access to the corporates’ databases, the main function of the platform wouldn’t perform.