The Rise of Incubators & Accelerators in MarTech

Posted by Steve Lubin

Accelerator and incubator programs provide a structured process for very early stage start-ups to gain the advice, financial and operational support along with the critical feedback required to fuel their development. For new entrepreneurs without deep venture capital relationships, these programs provide visibility to potential investors and corporations along with the insight that comes from those who have been down their path.

 

Incubator vs Accelerator

Incubators support startups entering the beginning stages of a company. The startup has an idea, but no viable business model and direction to transition from idea to reality. Incubators operate on an open-ended timeline and generally do not include equity investment. 

 

Accelerators help advance the growth of an existing company with a business model. These programs build upon the startups’ foundations and groom them for investors. Accelerators operate on a set timeframe, usually three to four months. As they do include an equity stake, these programs include a higher degree of mentorship and guidance.

 

Historically, these programs have been focused on well-established areas of investment such as FinTech, E-Commerce and mobile. However, there have been a growing number of programs in the MarTech, Advertising and Media verticals which have risen to prominence.

 

Rise of MarTech Programs

MarTech-focused early stage accelerator and incubator programs are leveraging the rapidly growing success of products and services surrounding Smart Speakers, Voice Tech, OTT TV and Cross-Media Measurement & Attribution. This provides the opportunity for an entirely new range of start-ups to participate in early stage programs.

 

Smart Speakers - New entries are leveraging AI and Machine Learning technologies to provide advertising and content-based solutions to the smart speaker segment. There are an estimated 120 million plus smart speakers in the U.S. alone. The global smart speaker market grew 55.4% in the second quarter this year to reach 26.1 million shipments, according to a new report from Canalys. Half of Amazon and Google smart speaker sales are now outside the U.S. as global demand quickly accelerates.

 

Voice Tech – The rapid growth of the smart speaker market has spurred the rise MarTech focused start-up Voice Tech companies.  Voice tech companies are creating a variety of content solutions and working with brands and agencies to build out audio personas and a new category of advertising.

 

OTT TV - Over the top (OTT) TV, think NetFlix, Amazon Prime and all the streaming media services offered directly to viewers over the Internet, is another burgeoning area for the start-up community and accelerator programs as OTT penetrates more and more homes as cord cutting continues and subscription options expand.

 

Cross-Media Measurement & Attribution - Another area of rapid growth is Cross-Media Measurement & Attribution which uses advanced analytics to allocate proportional credit to each marketing touch point across all online and off-line channels that lead to a desired customer action. It is used measure the effectiveness of advertising on OTT compared to traditional television and on-line and it can provide greater details such as who is actually viewing the advertisements, the device they’re using and more.

 

Companies participating in accelerator and incubator programs who are actively trying to solve the challenges of accurate measurement and tying viewership to on-line activity are attracting the most interest.

 

Examples of programs with a focus on MarTech include:

  • Internationally known global innovation leader, Plug and Play Tech Center launched a Media & Advertising Program in partnership with Amazon Moments with a wide focus on companies that impact the media and advertising ecosystem.
  • Comcast NBCUniversal LIFT Labs has launched a TechStars powered accelerator in Philadelphia.
  • Amazon Alexa Accelerator also powered by TechStars with an obvious focus on companies that leverage voice technology.
  • Sprockit, an innovation platform that connects media companies with startups.
  • Austin-based venture development group Mediatech Ventures with a client base of investors are looking for opportunities in MarTech and Media.
  • Israeli-based programs such as the Nielsen Innovation Fund and The Time are bringing Israeli start-ups to forefront.

 

Accelerators and incubators are a tremendous resource to corporate venture capital (CVC) funds as they are great at vetting companies for selection to the program and preparing graduates for future success.

 

CVCs who participate in these programs are able to work closely with the start-up, get to know their founders and can make an informed decision about whether to invest. Plus, CVCs are can leverage these programs to accelerate their own internal innovation.