Brinc leverages an “IoT trifecta” strategy to help companies take advantage of the Hong Kong – Shenzhen – Guangzhou corridor; one of the world’s most important trading hubs

Brinc, a Hong Kong-based accelerator programme for hardware startups, has raised funding from Artesian Venture Partners to fund two programmes, provide startups with seed financing and potentially participate follow-on investment.

Called Brinc Capital, the money will go towards an IoT and a drones programme. Over the past few years, Brinc has invested in 31 companies and notable portfolio companies include Soundbrenner, Scorpiox and EyeRov.

The money means Brinc will double its investment rate and plans to invest in 28 companies in 2018. Brinc will invest US$100,000 in IoT for 8-13 per cent equity and US$70,000 in drones-as-a-service startups under similar equity terms.

Drones-as-a-service means Brinc is going to be targeting companies that are building the overlaying software for drones, rather than teams that build the actual devices.

Manav Gupta, the Founder and CEO of Brinc told e27 they have capital to move forward beyond next year.

Artesian Venture Partners is spun out of ANZ Bank (Australia/New Zealand) and it puts money specifically into accelerators as a strategic play for deal flow access.

Brinc  also takes pro-rata rights to participate in follow-on rounds for portfolio companies if they secure three additional investors after the programme. Pro-rata rights basically means Brinc is given an inside track to invest in a startup to prevent dilution.

Brinc has also secured partnerships to expand to the Middle East, Poland and Israel.

“We are taking a very long view of the future. We recognise that we don’t have all the right answers, but because we [as humans] are able to continuously evolve and iterates ourselves, this is a very long view and a never-ending process and there are going to be opportunities for reinvention almost across every category as we start bringing in the physical data sets from the world,” said Gupta.

“The Internet of things is not really about a technology, it’s about the people,” he added.

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Over the last three years, Brinc has worked to build a community to bridge the gap between founders, manufacturers, distributers, wholesalers, retailers and investors in the Pearl River Delta region in China. (The three major hubs of the region are Hong Kong, Shenzhen  and Guangzhou).

Over the last few years, Brinc has helped bring to market 25 products, and a major part of doing so is overseeing the entire supply chain in China.

Part of accomplishing this goal was working with stakeholders and pitching the idea of an ‘IoT trifecta’.

IoT Trifecta

The idea behind the IoT Trifecta is to leverage the particularly unique strengths of the three major Pearl River Delta hubs — Hong Kong, Shenzhen and Guangzhou.

Hong Kong is great city to trial the business model, incorporate the company, find a product-market fit and lock down the legal structure and find working capital.

Shenzhen, right across the border, has become a global hub of product development. The advantage of the city is a startup can go from prototype to mass production extremely quickly and Gupta said they have taken a company from ideation to mass production in as little as six months.

Finally, Guangzhou — where much of the Brinc management team has their China roots — is one of the largest trade hubs in the world. People fly in from all across the world to try and find innovative products to take to their homes. Ideally, this is the city that would become the launchpad for significant growth beyond Brinc.

“What we have seen is this foundation and it has gotten stronger for us — deeper in Hong Kong and China with relationships, resources and access. We now have over 700 suppliers we work with for product development and have established relationships with distributors, and retailers and wholesalers that are helping our teams go to market,” said Gupta.

Part of the strategy to help facilitate their companies’ success is called the ‘lifecycle view’.

“We started an accelerator, but we realised that an accelerator is not the only way [a startup] wins,” said Gupta.

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The first step is about community and education. Learning from peers to refine ideas and make sure the business plan is heading into the right direction.

The second part is the actual accelerator programme, which is digging into the earlier ideas, their viability and making sure the plan is bulletproof.

A third bucket is the studio to nail-down the technical aspects and help teams build prototypes to eventually bring the product to the manufacturers.

Finally, and as the pro-rata rights hint, Brinc is not simply an accelerator. It wants to be the first investor in the teams that go through the programme and become a deal lead source for follow-on investments.

By the time the lifecycle has run its course, Brinc hopes it has taken a company from zero to 10,000 units.

Gupta says Brinc has been “built as a framework to accelerate business models, product development and go-to-market plans,” and they hope to continue to deepen and extend that ethos over the coming years.

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