Deal focus: RocketSpace plots a China trajectory

RocketSpace is targeting a $100 billion start-up. That is the value Duncan Logan (pictured), founder and CEO of the US-based accelerator, places on the ability to be successful, from an early stage, in China and the US. It means getting funding for multiple markets in order to outgrow any regional copycats; and it requires a global platform with access to local ecosystems. RocketSpace wants to be that platform.

This is partly why Chinese conglomerate HNA Group has committed $336 million to support the accelerator's expansion into new markets. RocketSpace's strategy is to have just one central campus - offering office-as-a-service and accelerator-focused services to entrepreneurs - in a technology ecosystem. But it acknowledges 50 evolved ecosystems globally, and sees more emerging. The firm is currently considering eight locations in China.

"Our goal is to build a network of technology campuses and China is a critical piece of our global business plan," Logan adds. "Given its expertise and immediate access across a wide variety of business areas like technology, capital and real estate, HNA proved to be a great initial partner as we enter this new market and will help us scale across the globe."

RocketSpace is only five years old but its alumni include 16 companies with valuations in excess of $1 billion, among them Uber, Cheetah Mobile and Blippar, and another 33 that have achieved valuations of $100 million and above.

Logan cites two primary contributing factors to its success. First, the company took the co-working space model that has proliferated in the US and "built a moat" around it. This was done by focusing on seed-funded technology start-ups only and by introducing strict guidelines for acceptance. Second, there is no requirement for an equity stake in these start-ups because it might discourage the best companies from applying.

"Start-ups become members once they have a proven product and outside capital. This rule has allowed us to attract the very best start-ups and enable them to stay on campus for much longer than the typical accelerator. The success of our campus community and broader ecosystem is built on the quality of our members," Logan says.

The RocketSpace approach will in essence remain the same in China, although the company is conscious of the value of customizing services for local start-ups. A potential complication is that accelerators have yet to carve a meaningful niche in China. Some industry participants claim the culture of start-ups in the country doesn't lend itself to accelerators; fears that ideas and staff may be stolen undermine the concept of sharing and mutual support between teams.

RocketSpace hopes to make two distinct characteristics count: it is not a volume player and only accepts start-ups where there is a genuine belief that it can support growth; and it has a global outlook. "We equally expect a number of our members to be international companies looking to break into China," Logan adds.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• North America
• Technology
• Early-stage
• Expansion
• USA
• TMT
• seed
• China
• RocketSpace