KBC Group Commits €100 Million to Boost Belgian Startups Through Start it @KBC Fund
KBC Group has announced an important initiative to make the startup ecosystem in Belgium more vibrant. Start it @KBC, KBC bank’s long-running accelerator program, will receive a backing of €100 million from the bank. This pledge is about creating more opportunities for startups to access early-stage capital which will lead to less difficult paths from pioneer ideas to real business growth.
This aim is a milestone for the new Start it Fund. Since 2014, Start it @KBC has been providing coaching and support to new companies through mentoring, access to the community, and networking. Annually, it typically collaborates with more than 150 scalable young companies and the total number of startups it has supported amounts to almost 2,000. However, a great number of founders have stated that advice and connections are not enough for them. They need money that they can spend while their growth journeys. The Start it Fund is a response to that concern.
According to the new composition, the accelerator will keep the program equity-free during the year. The founders will not give up any ownership at the beginning. However, a selection of startups may be invited to receive an investment from the Start it Fund after finishing the program. The fund is very discerning. KBC also informs that the selection process will narrow down to about the top one percent of applicants and the choice will be based on performance and potential instead of pitch decks and first impressions. The founders can decide whether to take the financing or not.
On average, the fund will put up about €300,000 into these businesses at an early stage. While some will get more, depending on their requirements and the scale of their business, the money is basically there for them to start up operations, improve their products, and gain ground in their markets. The idea is not only to keep startups alive in their infancy but also to let them have the means necessary in order to become solid and strong in the future, growing small-scale ventures and thus attracting additional investment of the kind.
If all goes well, and in return for the first investment, there will also be the opportunity for more money in the pipeline down the road. KBC Securities, a KBC Group unit, will be in charge of follow-on capital of up to €5 million to be able to support a company’s developments like market expansion or new product offerings or maybe even when contemplating a public offering. The feature of the follow-on option thus serves to complete the Belgian market where the supply of capital for the early-stages of business is more ample than that of the later-stages.
Further than this, KBC is confident that the closeness it shares with the startups engaged in the program will be a major factor in making the right investment decision. They have more accurate information because they witness first-hand how the startup team members react to issues and overcome them throughout the whole year of collaboration, thus they can judge qualities like efficiency and strength that otherwise hardly ever come up in presentations. KBC says that method puts those who are underestimated by giving them a fair shot to prove themselves.
In total about, the participants of Start it @KBC have so far raised more than €1.1 billion and created more than 12,000 jobs. A number of alumni like DESelect and Segments.ai have become very successful in their exit strategies. Now with this new fund, KBC wants to keep the wheel turning and on top of that, support more Belgian startups in actualizing their potential.
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