This Year’s IBM’s SmartCamp Gathers the Hottest Startups
Forget capture the flag. Startup campers at IBM’s SmartCamp play nab the investment dollar. Designed to encourage global innovation, SmartCamp connects the hottest startups around the world with not only resources and advice, but personal handshakes and a listening ear from some of the top venture capitalists in the business.
Last year, those handshakes amounted to more than $50 million in VC and angel funding awarded to finalists.
In addition, the winning IBM Global Entrepreneur of the Year receives a year of mentorship from IBM, free software, collaboration possibilities in IBM’s Innovation Centers, and a year of mentorship from last year’s winner, in order to speed marketing and connect to IBM’s network of venture capitalists. SmartCamp is part of IBM’s Global Entrepreneur program, designed to give exposure, resources and connections to well deserving startups.
“These companies which have been very limited to local markets and not well known outside of their circles suddenly get worldwide exposure,” said Deborah Magid, IBM’s Director of Software Strategy. “IBM has had a venture group for a dozen years, and it’s not about cash but relationships and getting insight into what entrepreneurs are doing. We understand it’s very important to get to know these companies when they’re very young. The interdependencies of people in these communities are essential for us as well as the industry.”
Crowned the winner of this year’s IBM SmartCamp Global Finals and the new IBM Global Entrepreneur of the Year, Profitero likewise has a lot to gain from the connections of IBM’s shared interdependency. The Ireland startup helps companies monitor their competition and set global pricing through software that instantly researches and compares competitor pricing data for similar products and brands. Profitero collects data on over 30 million products from over 2,800 global retailers to provide real time insight for price optimization.
“We envision pricing to become similar to stock trading,” said Volodymyr Pigrukh, CEO and co-founder of Profitero. “Large retailers will change prices hourly if not more often to reflect the market situation. Amazon already does this. Essentially, we provide a service previously only available to Amazon to every retailer. The better visibility retailers have into their competitors, the better value they can provide.”
In addition to connections to help raise a new funding round in the next three to six months to speed the company’s expansion to the US, the win also enables the company to directly innovate with IBM, Pigrukh, said. The company will look to partner with IBM to better integrate IBM’s Smart Commerce Solutions, as well as expand its product offering.
“Partnering with IBM is a rare opportunity for startups, and the networking is really great,” Pigrukh said. “The connections we’ve gotten from SmartCamp will certainly be useful for fund raising.”
Likewise, investors get their own incentive to participate as IBM’s selection process filters the finalists to include only the very best.
“The companies that show up at SmartCamp have passed the diligence test of of an IBM as well as the market validation test, and have been honed in on their presentation that they can get their ideas across to us very succinctly,” said Promod Haque, Managing Partner with Norwest Venture Partners. “Product development does not happen in a vacuum. Innovation is always done with early adopters of technology. Who better to provide market validation than IBM who lives and breathes those ideas for customers?”
Zia Yusuf, the CEO of last year’s winner, Streetline, will serve as a mentor to Profitero. Yusuf also served to judge the finalists of this year’s competition. The company works with cities to deploy sensor-enabled Smart Parking systems and produces a mobile app Parker™, an app telling drivers where those empty spaces are. The system pays for itself through a better enforcement of parking violations, as the meters also tip off the meter maids to vehicles whose time has expired or are parked illegally. Virtually unknown before winning last year’s SmartCamp, the company’s smartphones are ringing off the hook from cities looking to cash in on the smart meters. Over the last year, the company has expanded to Washington DC, New York City, Boston, Indianapolis, LA, Ashville, Dallas/Fort Worth and New Brunswick, New Jersey. Earlier this year, the company announced expanding to selective markets in Europe. It also now serves commercial parking lots and garages. Thanks to SmartCamp, the company secured a $15 million financing round in April and June of 2011. Through collaborations with IBM, the company has fully integrated its systems into IBM’s Cognos analytics platform to empower cities with greater visibility.
“Our win certainly put Streetline on the map very quickly at exactly the right time for us,” Yusuf said. “The partnership with IBM in introducing VCs, and also taking reference calls and discussing their views of the space and company was extremely helpful. IBM’s sales force actively went out and sold our solution as an integral piece of their Smart City offering. Obviously, as a small company, we simply can’t match that on our own.”
More important is the level of innovation that takes place by having so many cutting edge startups, VCs, and executives in one room, Yusuf said.
“It provides an unbelievable shot of insight, advice and information in a very compressed period of time,” Yusuf stated. “IBM is one of the few who can pull off attracting such high profiled VCs and CEOs to an event. These are not your typical gaming or web based startups. IBM is gleaning and finding those nuggets of gold and bringing them to the attention of the world, and it’s great.”
In addition to the global winner Profitero, other SmartCamp finalists from around the world include SkinScan, the creators of a mobile app that can detect skin cancer using fractals; SecureWaters, which uses patented technology to monitor toxins in surface water; and Palmap, a provider of GPS mapping solutions for malls and airports.
Aside from introducing promising startups to VCs and other insider connections, SmartCamp is also designed to propel innovation through collaboration with an accelerated sharing of ideas, IBM’s Magid said.
“It used to take a chess master decades to become a grand master because he had to fly around the world and play games with the best to see how things work.” Magid said. “Now you can get the same experience on the Internet, and the grandmasters you see today are in their 20s.
“The same thing is happening in technology,” Magid continued. “The speed at which you can innovate and the accessibility of other ideas and technology has really transformed the rate at which things happen. SmartCamp has been a very successful program that further propels this level of collaboration.”