Real scale-ups are the future
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INiTS CEO Irene Fialka explains why the Vienna Region is developing into a prominent hub for digital health start-ups.
For 17 years, high-tech incubator INiTS has been supporting founders in the Vienna Region with growth-oriented ideas and invigorating the domestic start-up scene. Besides seed capital and a tight partner network, INiTS primarily offers tailor-made consulting services. INiTS CEO Dr. Irene Fialka takes a retrospective look and uses exemplary young enterprises to show how Vienna can become even more important as an international hotspot.
How has INiTS changed and developed since its foundation 17 years ago?
Irene Fialka: When INiTS started out in 2002, the term "start-up" didn't exist, and neither was there an existing ecosystem. We had to introduce the idea of entrepreneurship into the academic institutions first. Today, entrepreneurship is driven by the universities and technical colleges themselves. Naturally, this transformation has also had an impact on our services. While in the early days, we offered funding for entrepreneurial activities, our focus is now on supporting mature and scalable research- and technology-driven business ideas. This is our core business.
INiTS is regarded as one of the best academic incubators. What are its success factors?
Irene Fialka: According to Swedish research initiative UBI Global, INiTS has been ranking among the top 20 global incubators for many years. In 2018, we reached number six in the worldwide "affiliated with universities" category. In the German-speaking countries, we are still number 1. Shifts in the worldwide ranking mostly occur because more and more universities offer business incubators, and many of our competitors aren't pure incubators but also build a bridge to university courses. Also, Asian accelerators and incubators sometimes have a considerably higher budget, so they reach different results. Surely, our success is connected to the highly differentiated landscape in Austria. Continuous development is an important success factor. We participate in the rankings in order to network with the best accelerators and incubators and learn from others. It is important to think outside of the box. We look at everybody from Singapore to Silicon Valley and analyse what might be a good fit for our ecosystem.
Since 2002, INiTS has supported about 240 start-ups. How many of these companies are still active today?
Irene Fialka: If you simply look at the survival rate, we are at about 80 percent. But this number cannot be equated to success. Many start-ups have remained smaller than we first hoped. This is absolutely legitimate because they still create jobs, and not every company can grow. RDI start-ups are a risky business, after all. Generally, however, in terms of our clients, we are interested in real scale-ups, i.e. companies which grow faster than average. Statistically speaking, the survival rate for incubated start-ups is much higher than for non-incubated start-ups. In terms of turnover and employees, the growth rate is higher. Non-incubated start-ups tend to report a turnover earlier, but their sales don’t rise in the medium and long term and instead tend to flatten out. This is the conclusion drawn a while ago by the programme evaluation commissioned by the Austrian Federal Ministry of Transport, Innovation and Technology.
Let's talk about the scale-ups. Which of the start-ups supported by INiTS would serve as a best-practice model for emulation?
Irene Fialka: Naturally, successful companies such as Medicus AI, one of the more recent examples, stand out. Medicus AI has developed support software for diagnostics laboratories. This Viennese company has come to Vienna thanks to the Vienna Business Agency's Startup Package, it has been reporting exemplary growth rates and is currently scaling up towards China. Another great model would be the diabetes platform MySugr, because it is growing and creating new jobs – with headquarters in Austria, but also internationally, because MySugr is currently developing its US operations. One of the foremost best-practice examples is biotech company Marinomed, one of our most successful start-ups and the first one in our portfolio which has gone public. Marinomed is an extraordinary life sciences company for many reasons: it didn't need venture capital, its products are produced by another Austrian company, Sigmapharm, and with its nasal spray, it launched a consumer product on the market which makes the difficult topic of biotechnology easier to understand for the populace. The hardware sector offers good examples as well, such as Lithoz, world market leader in the generative production of high-performance ceramics – an exemplary company which proudly waves the Austrian flag in the sector of 3D printing. But there are many successful examples in different areas, just to name a few of them: Blue Danube Robotics, ECOP, Fluidtime, Lexogen, ondewo, Shpock, Themis, Tubolito, Ubimet, Zoovu.
What about scale-ups that are bought up by a corporation?
Irene Fialka: The media talked about the fast growth of online marketplace platform Shpock by start-up Finderly, and this is certainly exemplary, but ultimately, Shpock was absorbed by a Norwegian media group, so I think design and software company Fluidtime would be a better example. It was one of the first real-time data processors in Austria and has become the leading supplier of mobility information systems. Two years ago, the start-up was bought by Kapsch, so the technology lives on in an Austrian company. And when it comes to Ubimet, one of the biggest private weather services in the world, Red Bull, another Austrian company, invested in a scale-up. I think all these examples demonstrate the diverse development of the domestic start-up scene.
Where do you see the strengths of the Vienna Region's start-ups?
Irene Fialka: The Vienna Region is very interdisciplinary. My examples show that a lot is going on when it comes to the intersection of life sciences and IT, but also hardware and materials sciences. In the areas of ICT, life sciences and greentech, Austria – and especially Vienna – creates companies that are unique worldwide. It is difficult, however, to position oneself as interdisciplinary, which is why internationally, there is more focus on cities like Berlin as start-up hotspots, even though Vienna's start-up landscape is much more diverse compared to Berlin.
The Health Hub Vienna (HHV) accelerator programme has been supporting innovations in health economics for almost two years. How successful is it, and have you been able to attract international attention?
Irene Fialka: We have managed to build an international brand together with our partners, especially our launch partner Uniqa, and to offer an excellent programme for later-stage start-ups. Besides several Austrian companies, we were able to attract many international start-ups which bring along an existing client base. Our pace is truly unique. During our last programme, we managed within just three months to create fantastic initiatives where emerging start-ups launched promising projects together with our partners. Internationally, the Health Hub Vienna has gained a good reputation much faster than we had expected in our wildest dreams. International start-ups of ever-higher quality want to come to Vienna with all their strengths in order to keep growing on a European level. It has turned the Vienna Region into a real hub for digital health start-ups.
How is the INiTS network flourishing?
Irene Fialka: As we have been active for 17 years, we are able to offer a huge network. With every start-up, the network grows by additional mentors and investors. For example, the founders of MySugr, Shpock and Zoovu are investing in new start-ups. We have partnerships with the best university incubators in Europe. This benefits the start-ups in our network. The scene keeps growing dynamically, so I'm very optimistic about our future. The start-up scene in the Vienna Region is on the right track, even though there's still a lot to be done.
The interview was conducted by medienkomplizen | Christian Scherl
Photo: Irene Fialka © INiTS