The Level 39 technology startup accelerator based in Canary Wharf, East London, wants to attract startups that are developing services for the business sectors that predominate in the area: finance, retail, and services for the ‘smart city’. Level 39 claims to provide an ecosystem where applications can be fully tested.
Interview with Eric Van der Kleij at the Le Web conference, which took place on 5-6 June in London. He is head of the Level 39 Technology Accelerator, which opened its doors in March this year with the aim of helping startups that specialise in finance, retail and smart city technologies and fostering co-investment between British and foreign investors. The accelerator also hopes to act as a shop window that will enable professionals from the various sectors involved to discover innovations which are likely to have an impact on their businesses, and thus to promote collaboration between them.
L'Atelier: Level 39 is hoping to attract startups involved in finance, retail and smart-city-related services. Why these three?
Eric Van der Kleij: Well, Level 39, which was set up by the Canary Wharf Group, a property company, is located on the 39th floor of One Canada Square, the tallest building in the Canary Wharf complex, one of London’s largest business centres. There are a lot of banks and financial institutions, several shopping malls, and Wood Wharf, a 20-acre site to the east where we can develop the city of the future.
So what the Canary Wharf Group set out to do was to work out a strategy linked to the new technologies. The Group wanted to attract firms not only from the finance sector – which has predominated in this area for a long time. So far we’ve had 182 applications from technology companies since we launched eight weeks ago.
L'Atelier: Are these various ecosystems receptive to startup-generated innovation?
Eric Van der Kleij: Yes, increasingly so. When we talk about finance, you need to know that 10% of UK GDP is generated by financial services. That means there are many opportunities for marketing these technologies. All the more so since we are now at a key moment. All the players in the ecosystem, whether large or small, are these days subject to tighter regulations and facing similar challenges: cost reduction and the search for new products and innovative approaches. For example they need data-based tools to help them manage risk, to get a clearer view.
So there are major opportunities for players who are able to respond to these needs and foster new business models, such as those being brought forward by the collaborative economy: peer-to-peer investments and loans, crowdfunding and so on. In fact London is ahead of the game on this point, at least as regards crowdfunding for equity investments. We have sites like Seedrs [an online platform for investing seed capital] and CrowdCube [an equity crowdfunding platform], which have obtained official approval from the Financial Conduct Authority here.
L'Atelier: So what’s the link between the startups you’re planning to incubate and the physical environment in which you’re working?
Eric Van der Kleij: Well, it enables you to trial in realistic conditions. The Canary Wharf Group owns the three shopping malls in Canary Wharf, and the site also includes a new station for Crossrail, a new transport project linking Maidenhead [west of London in Berkshire] to Heathrow Airport. Our aim is to transform these places into ‘living labs’, so that firms developing the new technologies that will shape the retail sector of tomorrow can come and try out their systems here. A number of retailers will be participating and will trial the projects that have been incubated. We could also test out different ways of interacting, such as interactive maps based on traffic flows and footfall, digital signalling systems, etc. Last but not least, we’ll also be targeting solutions which improve the relationship between bricks-and-mortar retail and online shopping.
We want to make Level 39 the place where companies come to get up and running and experiment. In addition we’ll shortly be announcing a dedicated accelerator programme. We also intend to invite sector professionals to come and see for themselves what’s happening here, in terms of retail and the ‘smart’ city, our goal being to prototype services for Wood Wharf, which could potentially serve as a window on what will be the city of tomorrow.
L'Atelier: So for you the accelerator concept also involves testing out in practice…
Eric Van der Kleij: The question is: can you innovate without testing? When you think about what innovation means, you might say that it means new ways of solving a problem – either one that you targeted or one that just popped up – or you might say it means creating something totally new. In either case, the mark of success is market takeup. Now as a general rule, there’s a time-lag between coming up with the actual innovation and the moment when the product or service is ready to go out on the market. That takes a lot of work and requires investment. By trialling straightaway, and adapting to the needs of the people on the ground, you can move much faster.
But of course there’s some fear on both sides. The startup is worried about being taken over, and the established company is nervous about change. This is where we come in, with our go-between role and the ‘sandpit’ we’re providing for them to play in. We get the different parties to meet up, get to know each other and to see how each side can take up the other’s ideas. Everyone needs to understand the very real value and advantages of sharing!