This is a guest post by Levon Brutyan from Collectly, Inc.
Collectly is one of our portfolio startups (Collectly.co). Collectly helps banks and businesses minimize losses on bad debts while keeping the customers loyal.They are part of the second Nordea and Nestholma Startup Accelerator batch. Originally posted here.
Collectly is a web application that helps all types of lenders ease and maximize bad debt recovery with few clicks. The tool utilizes deep learning algorithms that help resolve one of the biggest problems in debt collection industry (Read here) and return more money to the lenders.
Today I will share with you what is Nordea Bank Accelerator about and why it gives us a value comparable with the one non-fintech startup become from YC or 500 Startups. Currently, we have survived 1 month of the program and I believe that makes sense to kinda share our experience with you.
By the way, for those of you who don’t know what is Nordea Bank, please see this. Simply put, Nordea is the largest bank in Scandinavia and one of the largest banks in Europe.
(a) How to get in?
Getting into Nordea Accelerator was a long, challenging, but a rewarding experience for us. The application process starts with F6S and is pretty straightforward (comparing to the one of YC, e.g.). After about two month of waiting we got the invite to participate in the Training & Selection week. Considering the fact we got accepted into Plug’n’Play FinTech, StartupboothCamp and Fintech Innovation Lab we were a bit surprised with not just being invited to one-time interview but a whole week of training and selection. The good things about this week were: traveling to the beautiful Oslo, Norway and actually getting reimbursed for the tickets and lodging ($1,800).
We have compared the values that might give us all of 4 accelerators and for rational reasons we’ve picked up, thinking of Nordea Accelerator not only as an accelerator, but more as as an access to Nordea Bank as a customer/partner. Nordea Accelerator looks for promising startups all over the world in fintech or any other industry that might be strategically aligned to the business of Nordea (you have to think about it in advance). For instance, in our batch we have three different startups that do insurance (Fjuul, D-Vision, and Tickkr) or even some HR related startups that might be beneficial internally for Nordea. Important to mention Nordea Bank acquired two startups right away from the previous batch.
So, the requirements are simple: great team, bank related business, promising business model, traction (non paying customers do count). Well, there are some startups that didn’t have any traction and were invited to the Selection Week, but they still have tested their technology somehow.
The Training & Selection week is a short, but very intensive MEA-kinda (Master of Entrepreneurial Arts:))) experience mentored by a great, brutal, and very experienced entrepreneur Antti Kosunen and his amazing VC Nestholma team. I guess the Selection Week deserves a separate post, but here what we have done during it: showcasing our products, business models, working on lean canvases, talking to customers, talking to real VPs of Nordea (many of them like almost 15–20), and of course pitching, pitching, pitching. I believe we’ve been tested by both Nordea and VC Nestholma not only how good we are as entrepreneurs, but also how good we can sell, and how likely Nordea Bank can be interested in doing business with you.
At the end of the Selection Week from about 35 different startups 12 have been selected and offered to sign a standard convertible notes non-negotiable (I personally think depends on your stage) agreement to get a funding of EUR 12K in exchange of 4% of equity. You will say, WTF?!? Only EUR 12K?!??! Yes, and I’ll tell it’s really worth it in case banks are your strategical partner/customer/channel/supplier. It’s really one of the most smartest 12K I’ve seen so far.
(b) The structure of Nordea Accelerator
Nordea Accelerator is a separate entity of Nordea Bank (at least seems to be). All the investments are done by VC Nestholma. Most of the sessions, learnings, contacts are provided also by VC Nestholma that is a partner of Nordea Accelerator. The guys at both Nestholma and Nordea Accelerator are very friendly, helpful, and brutal to startups. They will provide you with powerful connections inside and outside the Nordea Bank, but limited to Nordic region (that’s definitely a downside for some of the startups).
(c) Nordea Bank as a customer/partner (APIs, data)
As a customer: I believe, Nordea Accelerator is the best way to validate your business model and actually get a pilot with Nordea Bank. I do believe, from every batch about 4–6 startup will get their pilots, sooner or later. The fastest you can do is 1 month.
As a partner: Here the things become a bit harder. The majority of startups need some kind of integration and especially the data. Nordea Bank has started the program of Open Innovation and it’s actively developing its APIs, but as of today almost no kind of APIs are accessible from the outside.
In case you want to distribute you services to 300K of corporate customers that Nordea is servicing it’s possible, but of course you have to find a viable win-win model for both you and the bank.
I personally haven’t participated in neither YC or 500 Startups programs, but as I do have a lot of friends who participated in either of the programs and based on their opinions I can imply Nordea Acceleration program is closer to what 500 Startups offers nowadays. There will be a lot of lectures, workshops, team work, mentoring, i.e. learning. The program is an ideal fit for the teams that don’t have any kind of entrepreneurial experience, a good fit for the teams that still struggle with the product-market fit, and still somewhat useful for already experienced team that grow rapidly.
(e) Location & Facilities
Nordea Accelerators runs the program simultaneously in both cities: Helsinki, Finland and Stockholm, Sweden. Helsinki has a lower living costs (what is really nice, considering EUR 12K, which are enough for 2 members for the whole program), great office, many conference rooms, working desks etc. Stockholm is definitely the most beautiful city among the Nordic countries, but with a higher living costs (still way cheaper than SanFran or NY). It also has a great office (not as fancy as Helsinki) and amazing places bars, cafes, restaurants (relax, you won’t have time for that (ha-ha-ha)).
1st Month Conclusion
Collectly is a pure fintech startup that utilizes deep learning algorithms, aka AI, and is definitely b2b focused one. The first month of the Nordea Accelerator was amazingly efficient for us. I can’t share any results with you, because they’re confidential, however I can assure without this particular accelerator we would never achieve any of the goals in that amount of time.
So, guys, go to http://nordeaaccelerator.com follow the page and mark your calendar whenever the application period opens again. Oh, yeah, and definitely wait for the second report on the accelerator in a month:)
Levon Brutyan CEO/Co-founder Collectly, Inc.