U-Start: connecting investors with emerging market ventures

International funding platforms with their sights set on emerging markets are coming in thick and fast. U-start, a new online platform from Italy, matches entrepreneurs with investors through its growing footprint of networks in Kenya, Russia and now, South Africa.

While U-Start also intends to serve areas of Europe with smaller startup eco-systems, its 2013 roadmap shows significant emerging market intent with further expansion planned for South America, India, Asia, and Africa.

When entering a new region, U-Start partners with local businesses, academia, investors and entrepreneurial communities to develop its target markets. In South Africa for example, U-Start has partnerships with Activa, Unreasonable Institute, University of Johannesburg, ASEN, Hub Johannesburg and Bandwidth Barn, to name a few.

Born out of the desire to make Italy’s startup community more attractive to international players, U-Start’s matching platform has grown to accommodate international startups in need of funding, and investors looking to expand their investment portfolios.

Beyond matchmaking and facilitating deals, U-Start offers startups things like business plan guidance, support during the investor courtship, and e-learning resources for improving their pitch.

Investors on U-Start benefit from a database of business plans that can be searched by quality, and that can be broken down by sector, partner association and country. The proposals are benchmarked using a proprietary scoring model that evaluates the product/service, market reach, financial sustainability, growth, and so on. U-Start also guides investors through choosing the right geographical context to invest in, or where to relocate investment opportunities.

U-Start hosts startups in various stages — from seed to growth — and has about 94 candidates on its roster currently. Some of the ventures are looking to raise as much as €3-million in categories such as technology — which includes green and bio tech — and social entrepreneurship.

Director of Operations in Africa for U-Start, Zachariah George, tells us that the platform’s growing list of 25 investors, includes angel investors, venture capital firms and corporate venture funds. How much should startups hope to raise? “Given the diversity of entities and focuses, there is no “typical” ticket: the platform, through its technological tools and advanced search engine, allows for companies looking for different levels of funding (and tools) to find the right investors, and vice versa,” says George.

George says that although U-Start — still in beta — has been open to entrepreneurs since July 2012, the investor side of the platform was launched in October. In terms of deal activity he added, “we are aware of a handful of investors that are pursuing discussions with entrepreneurs on the platform and are waiting to hear if a transaction is yet to close.” Since deals between startups and investors are discussed within U-Start’s private deal room, the actual investment, term sheet and transaction closing happens ‘outside’ of U-Start.

U-Start runs as a subscription service and is not involved in brokering deals or taking commission. Investors are required to pay a €1 000 fee to use U-Start for 12 months. Entrepreneurs can access the platform for free through a partner association or university, or for €40, €70, and €100 for 6 months, 12 months, and 24 months respectively, without a partnership.

Looking ahead, U-Start will provide white label versions of its website that can be used for business plan competitions, and serve professional associations, angel investors or funds.