Entrepreneurial Spark, powered by RBS & NatWest, is set to make its mark as the world’s leading business accelerator programme for start-up and early-stage companies.
With the UK government maintaining a strong commitment to the encouragement, development and growth of the small and medium-sized enterprise (SME) sector, the potential for entrepreneurs and innovative start-ups to play a huge role in the UK economy has never been greater.
Entrepreneurial Spark, powered by RBS & NatWest, is helping to turn this vision into a reality. Launched in 2011, the venture, which also has the backing of KPMG, three Scottish prominent philanthropists and a range of top business leaders, provides a host of support services from office space to mentoring to new businesses in the UK, as well as attracting participants from overseas.
Today, it is well on track to becoming the world’s largest free business accelerator programme.
“Entrepreneurs and business start-ups are recognised as the backbone and lifeblood of the UK economy, as well as being significant wealth creators,” says Gordon Merrylees, head of entrepreneurship at RBS & NatWest. “It is the prime focus and policy of our bank to support small businesses across the UK from start-ups and early-stage businesses to those experiencing steady growth.”
Since its formation under CEO Jim Duffy, Entrepreneurial Spark has come a long way. By the start of this year, 352 new businesses had attended the programme, which offers a six-month (hatchery) period for business start-ups and the option to stay on for a further twelve months as early-stage businesses.
So far, it has helped these businesses to secure more than £18mn of investment; create 1,028 new jobs; generate a combined turnover of more than £41mn and continue to operate successfully – 82% of participants in the scheme are still trading, nearly twice that of businesses that start outside of it.
Moreover, there have been two further intakes of start-ups this year, and more hatcheries have now been opened.
“With 560 entrepreneurs coming into the programme in the UK this August we will see our biggest intake so far,” says Duffy.
“What makes us unique is our focus on mindset and behaviours – we build people who build businesses,” he continues. “Key to this is being based in a collaborative office environment suitable for building teams with access to business enablement and support from a pool of over 50 business mentors.
“There are also ample opportunities to meaningfully network during event nights, workshops, pitch practice and more.”
Entrepreneurial Spark’s longstanding partnership with RBS & NatWest has helped to spearhead the programme’s development.
At RBS, Merrylees, who first recognised opportunities for the bank to get involved in Entrepreneurial Spark through a chance meeting with one of its philanthropist backers four years ago, points out that for the bank, this involvement has provided a means of building trust in the bank, and growing its reputation among the small business community.
“We recognised that working with Entrepreneurial Spark would give us a great opportunity to lead, facilitate and enable the ecosystem in Scotland and demonstrate our support for entrepreneurs and start-ups, in line with our policy of helping small businesses grow,” he says.
With the initial focus on Scotland, RBS set up accelerator hubs for businesses in the programme in Glasgow and Ayrshire, and in Edinburgh too, where the hub is currently being relocated to the RBS headquarters.
The hubs provide business start-ups with free office space and parking and free access to Wi-Fi, as well as mentoring, business advice, banking services and help accessing funding.
“As a result of cost-cutting, business efficiency measures and changing customer behaviour, many buildings are not being used to full capacity, and we have been able to use this to provide free office space and other facilities,” says Merrylees. “No other organisation or bank involved in accelerator programmes is taking advantage of vacant office space at its own premises to this extent.”
Today, there are huge ambitions to develop the programme with new accelerator hubs planned across England and Wales. Earlier this year, NatWest opened a new hub in Birmingham, with a further three being launched in Brighton, Leeds and Bristol in September.
More accelerator hubs are in the pipeline for NatWest premises including Cardiff, Manchester and Belfast, with further potential locations being investigated.
“By the year 2017, we will have rolled out the business accelerator programme in 11 UK locations, if not more,” says Merrylees.
The bank has also participated financially in the scheme by, for example, helping to sponsor a series of awards ceremonies, in conjunction with KPMG, at which each hatchery in the programme is offered £100,000 per year in prizes.
It also makes debt finance available to businesses in the scheme.
“We do support start-ups at an early stage, which show they have real potential to grow,” Merrylees adds. “We provide them with both banking facilities and lending services, although in some cases bank finance is not the most appropriate type of funding for a particular business – especially if it is pre-revenue. In these instances, we advise and guide the business concerned on the most appropriate type of finance, and then help it to secure this finance through referrals.”
Today, many of the start-ups that have been through the programme are already experiencing remarkable success. Edinburgh-based shopping app Mallzee, for example, has hit a number of milestones, including securing a six-figure user base in 125 countries worldwide. “Having just raised £2.5mn in funding, Mallzee is a great example of how Entrepreneurial Spark can help businesses grow and excel in their field,” says Duffy.
Boosting innovation at RBS
RBS has also been keen to take advantage of the technological innovation that the programme encourages by relocating its own technology solutions teams to accelerator hubs.
“This represents a major cultural change for the bank,” says Merrylees, pointing out that it provides RBS staff with the opportunity to learn from entrepreneurial businesses. “Greater collaboration with start-ups that have innovative ideas will ultimately enable us as a bank to offer new technologies and services to our customers.”
The bank is also keen to drive an entrepreneurial spirit across its own organisation, with a new “entrepreneur development academy”, which will be attended by 10,000 staff members over the next five years.
“We are really trying to drive a cultural change which will help us to better service entrepreneurs and start-ups,” says Merrylees. “We expect that our own staff will become more entrepreneurial by attending the academy and that this will result in them providing all our customers with a better service.”
Best of class
Merryless believes that the accelerator programme supersedes start-up programmes promoted by other leading banks for a number of reasons – most notably its scale and reach.
“Other banks with accelerator programmes have launched them specifically for technology-focused start-ups and/or business start-ups emanating from prominent universities. We offer our accelerator support services to all types of entrepreneurs, which we recognise as being the lifeblood of the UK economy,” he says.
“Our programme is not purely focused on fintechs – nor just the London market. We have preferred to take a regional city approach so as to accommodate business start-ups right across the UK. This is very important given that enterprise and ideas are not confined to London, and that many start-ups, once they start growing, often find the cost of being located in London prohibitive.”
“We are not sector-specific and truly believe that great business ideas come from all kinds of people and places,” adds Duffy. “While we want to put our resources into ambitious firms that will create jobs, opportunities and wealth, these could be social enterprises as well as your typical technology start-up.”
The ambitions of Entrepreneurial Spark know few limits. Earlier this year, it made its first move overseas by launching Entrepreneurial Spark, powered by Viridian, in India.
“Working with our local partner in India, Viridian, the programme has the potential to be rolled out very quickly in what is a huge market with so many entrepreneurs hungry for success,” says Duffy, noting that Entrepreneurial Spark has ambitions for further overseas expansion, and will assess entry into each country on a case-by-case basis.
“RBS does have a presence in India, and we are working with our team there to see how we can develop this partnership,” adds Merrylees. “However, our prime focus is on the UK market, and we need to make sure that as a leading UK bank, we are serving our
UK customers as well as we can.”
Start-ups and early-stage businesses interested in Entrepreneurial Spark can find out more at: www.entrepreneurial-spark.com or engage via @ESparkGlobal. Applications for the February 2016 intake open on September 9, 2015.