Startup Scouting: How an APAC Firm Expanded in the US [Case Study]

Figure 1 An overview of Runway’s startup scouting for an asset management client during a 54-month service period.

Challenge: identify startups and engage entrepreneurs

An APAC asset management company was looking to invest their new fund overseas.

Their newly-established US investment team wanted to expand network and coverage of knowledge outside their home country market. The team was looking for an innovation consulting service to:

  • Identify high-potential startups in the US and other countries;
  • Engage entrepreneurs in diligence conversations;
  • Navigate Silicon Valley and the San Francisco Bay Area innovation ecosystem.

Sound familiar?

We can help.

At Runway Innovation Hub, we have worked with dozen of global companies like Epson, IBM or Emirates to help them leverage relationships with startups, and generate real business results.

Solution: monthly startup scouting report and diligence conversation with founders

Runway took a three-pronged approach to meet the client’s needs:

Provide a detailed monthly startup scouting report containing deep dives into investment potential across artificial intelligence (inc. machine learning), autonomous cars and vehicles, robotics and automation, energy (batteries, infrastructure, storage), and hydrogen-based technologies. 

Based on the client’s feedback, coordinated diligence conversations with founders of interesting startups.

Advisor to the client on the best practices in startup screening, identified potential strategic partners, high-quality networking events worth attending, and brand-building sponsorship opportunities in Silicon Valley and the San Francisco Bay Area.

Results: 692 startup scouted, 79 exits with earlier exits and higher exit values

Runway’s team of analysts and researchers has identified and qualified over 692 startups for the investment team of the client during the measurement period of 3.5 years.

Among those startups, nine went public via an initial public offering (IPO) and 70 were acquired after Runway’s scouting (and as of October 31, 2020).

In-depth analysis of these startups with an exit shows that Runway-scouted startups:

  • Gain exit faster when compared to the median for all the US startups [1, 2], with a median age at IPO at five years old, a median age at acquisition at four years old, and a median duration from first venture capital (VC) investment to acquisition at 3.5 years old;
  • Have a higher exit valuation when compared to the median for all the US startups [2], with a median IPO value of USD 662.98 million, and a median acquisition value of USD 144.3 million.

Figure 2 Number of IPOs and acquisitions by year from Runway-scouted startups.

Figure 3 Duration from first VC investment to acquisition for Runway-scouted startups in comparison to US median values by acquisition. Note: LBO excluded for comparison.

The client invested in seven Runway-scouted startups in 11 rounds of investment in 2017-2020, which translates to 30% of the client’s relevant startup investment activities during the same period.

References

[1] How Long Does It Take a Startup to Exit? Crunchbase (2018).

[2] Pitchbook-NVCA Q3 2020 Venture Monitor, Pitchbook (2020).

* Source of data used in this case study: Pitchbook.com

Want to learn more about Runway’s Startup Scouting? Book a 15-minute call with our Director of Corporate Innovation.