Denmark's Accelerace Boosting Startups in new Smart City with €250,000 Grand Prize

    Ever wish you had an entire city with next-generation infrastructure to test out your startup on? That’s one thing Danish accelerator Accelerace can hook your startup up with this fall, and we’re looking at their new program as a chance to cover the accelerator properly. We’ve written about a number of the companies they’ve helped accelerate, but for the first time we’re taking a deeper look at the accelerator that bills themselves as “an actual accelerator”. Looking at their own stats, since 2008 they’ve worked with over 188 startups and spin-offs, and their startups have received more than €72 million in funding.

    As a brief overview of the Copenhagen-based accelerator’s normal operations, companies participate in the Accelerace acceleration program for six months, where Christian Hvashøj Schaarup says that they work approximately 200 hours per company to mentor their business and prepare them for future venture capital.

    Accelerace has good reason to prepare companies for the next step of funding; additionally the organization acts as in investor or loan provider, where they invest focusing on Life Sciences, Industry, and IT.

    The average accelerators across the region seem to give somewhere around €15,000 for 7% equity in their accepted companies, but Accelerace structures things differently by charging a fee of €15.000 to work with the company, but with no equity taken. Additionally Accelerace provides an optional €15.000 loan upfront to boost the companies from the get go.

    Next Step
    Accelerace is participating in a pretty ambitious new project this fall. SE (Syd Energi) who is one of the largest energy and broadband provider in Denmark, is attempting to build a new city somewhat within Esbjerg, on the west coast of Denmark. The project, called Next Step City, is essentially a business park connected to 261,000 households on a unique energy and fiber broadband infrastructure. The households are all connected to the smart grid, and 70% of all households have access to high speed fiber broadband.

    This partnership is a unique opportunity for startups in Northern Europe. Accepted companies will have access to a ‘living lab’ where they can test new products and services on real customers, and the program will focus on companies that can really take advantage of this opportunity in the digital infrastructure area. The target group comprises companies within smart energy, fiber broadband, e-health, as well as mobile IT products and services.

    “We know the target group is quite broad,” says Schaarup, “but we choose to make it broad in the beginning for us to scout quality startups that we can help scale to international success and because the program is running for at least 3 years. So we’ll take our learnings and narrow it down a little bit.”
    Right now they’re focused more on the quality of accepted companies rather than a quota so there will likely be somewhere between 5 and 15 startups accepted.

    It’s free to participate in this program, and every startup accepted into the NextStep program will get access to free housing for three months, a €30,000 loan at a 10% interest rate, with no payback for the first year. Additionally the startup that is doing the best at the end of the program will win a grand prize of €250,000. This is the biggest entrepreneurship prize in Europe and the US right now, as no equity is taken. The deadline for applying to this program is coming up on the 15th of September.

    There is a lot going on at Accelerace, but they’re clearly an interesting program that’s worth digging deeper into, especially if you feel that their loan terms are a better deal than straight equity, or if you could really benefit by plugging into a city.