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How is MTS innovative ecosystem useful for startups

Wednesday, June 3, 2020

MTS is one of the largest GSM operators in the world by the size of the subscribers base that is being transformed into an IT-company and actively develops corporate innovations. MTS has also launched an innovation hub so they can accelerate research in new perspective directions as well as launch new features and services. Dmitry Kurin, the Head of Innovation and investments centre named MTS StartUp Hub, told Startup Jedi how the MTS ecosystem works, how it can be useful for startups at different stages and how to join it.

MTS StartUp Hub is also actively participating in Emerge, an international conference, and in the framework of this conference, we are posting this article.

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We talk to startups and investors, you get the value.

Why does MTS work with startups?

For quite a long time, MTS has been not just a telecommunication company but a digital ecosystem. MTS Group includes such business-verticals as MTS Bank, #CloudMTS, streaming platform, Artificial Intelligence direction, IoT and many others. MTS is ready to attract innovative solutions from the open market in order to boost the development of these directions, as this often allows working with ready-made proven products, reducing the time to market of new MTS product solutions. The goal of working with open innovation is to prepare startups for launching pilot projects, jointly formulate hypotheses and KPI for these pilots. Successful pilots can be scaled, getting the opportunity to conclude long-term relationships with the company.

MTS StartUp Hub
Click on the image to see MTS StartUp Hub's profile of the Rocket DAO platform


MTS startUp Hub

Why should startups work with MTS?

For startups, it is an opportunity to scale their products, get access to MTS sales channels, receive expertise and obtain a strong strategic partner. At the specific stage of startup development, they can receive investments from the corporate MTS venture fund. Besides, MTS can help to develop and tune startup’s products and solutions for 5G-networks.


Does MTS give money and on what conditions?

MTS as a developed digital system has various tools for startup financing, depending on the maturity stage of the project’s product. Depending on the way MTS builds work with a startup, different conditions are stipulated.

If a startup becomes a resident of our corporate accelerator, it receives a grant of ₽200 thousand. If they manage to complete the acceleration process successfully, the startup launches a pilot with one of the MTS business lines. MTS allocates up to ₽500 thousand for pilot realisation. After the pilot, the project has a chance to be scaled, or in other words, to become a long-term partner of MTS. This can be done through the purchase of a license for a startup’s product, through the creation of a joint venture with MTS or through the model of joint sales (revenue sharing). Also, startup founders can be offered to sell the company and develop their product within the framework of MTS company.

We have a 5G Incubator. There, startups can test their solutions in next-gen networks. In the framework of this program, it is possible to receive a grant of ₽500 thousand for further development of cases using the 5G network.

Besides, we have a venture fund which is ready to invest up to $500 thousand in startups whose products can be implemented in our company.

MTS startUp Hub


MTS startUp Hub

At what stage should a startup start working with you?

If we are talking about accelerators, we’re waiting for startups that have at least created the MVP and their value is proven by first sales.

If we talk about 5G incubators, we are ready to accept projects both with the MVP and with the ready-made product. In addition, an important moment for any potential resident of 5G Incubator is the justification of how new generation networks open up new opportunities in the product and solve customer problems that could not be previously solved using other communication technologies.

The venture fund invests at the late seed-stage and at A-rounds.


In which industries do you search for startups?

We are looking for startups that correspond to MTS strategic directions. In particular, those are telecom, media, fintech, cloud and digital solutions. The specific list of selected areas for each startup depends on the needs of various business-verticals of the MTS group. For example, in the last selection, we were searching for projects in such industries as retail sales, fintech, 4.0 industry and ecological innovations. We’ve received more than 550 applications and selected 19 startups.


Are you interested in startups from Belarus?

We are very interested in startups from the Republic of Belarus. Moreover, we have worked with projects from Minsk earlier. In the new accelerator selection, one of our new residents is Tap2Pay (we’ve told about it in this article) — a service which allows receiving payments in different digital channels: on websites, social networks and messengers. MTS Bank acts as a business-client. The Republic of Belarus is well-known for being a Motherland of many successful technological projects. In MTS, we want to increase the inflow of Belarusian startups into all our tools that we use to work with open innovations.


Do you have experience working with international startups? If a startup makes it to your accelerator or incubator ,  will they need to come to Moscow?

In March this year, we launched an online-accelerator for international startups. All interactions in the accelerator, including the Demo day, are held online. Apart from that, starting from March we transferred our fourth accelerator selection to a remote mode. The Demo day was held on March 10, and it was also held online. By the results of the Demo day, we’ve launched 14 pilot projects. In such a way, those international startups, which have become residents of the accelerator, won’t need to go to Moscow regularly.

When it comes to 5G-startups, it is another story. Our 5G Centre is located on VDNH in Moscow. In order to test their solutions in next-gen networks, startups would need to come to Moscow. However, we are flexible here. Each startup decides how many tests they need to conduct and how often they need to come to our Centre.

MTS StartUP Hub


What are the MTS StartUp Hub locations?

Last year, we launched branches in Berlin, Israel and South-East Asia. Our international tech scouts help us to attract startups from these regions. In particular, in the fifth accelerator selection, apart from the Belarusian startup we’ve mentioned before, there is also a French system of predictive diagnostics for industrial electro-engines PREDICT-ADAPT, a Polish system of automated video creation for marketing communication Vintom and startup from Singapore, which deals with the optimization of digital companies and it is a marketing influencer in social networks. The resident of the 5G Center is Doubleme from Great Britain. It is a system for holographic communications that works with AR.


Could you tell us about the MTS venture fund strategy?

The fund invests in prospective startups in such directions as big data, artificial intelligence, Internet of Things, esports and media services. As I mentioned before, the minimum paycheck amounts to $500 thousand. When the fund chooses the startup, it is important that the project has any strategic value for MTS. For instance, the startup functions on the fast-growing market, where MTS is not properly presented. In this case, in perspective, the project can create a new product vertical in the company.


MTS startUp Hub

Why did you launch a 5G Incubator if there are no 5-gen-networks in Russia yet and there is no clue when they will be launched?

Networks of the fifth generation will be launched in Russia anyway. And those who at the time of launch will enter the market with ready-made 5G solutions, will win the competition. If you start working with 5G networks now, startups will provide themselves with a significant advantage in the future. MTS, for its part, wants to test hypotheses and develop cases for a new network.


What else can you offer to startups apart from the acceleration, 5G Incubator and venture investments?

Last year, MTS signed an agreement with Singapore Enterprise. It is a Singapore National Institute of Development. Following the agreements, Singaporean partners are ready to support startups from our accelerator and 5G Incubator and help them enter the market of South-East Asia. In such a way, MTS StartUp Hub has become a bridge that enables our startups to enter the Asian market. We also have partnerships with similar Institute of Development in India named Invest India and Sistema Asia management company.


MTS startUp Hub

Could you tell us what startup technological solutions have already been implemented in MTS with the help of MTS StartUp Hub?

At this point, we have implemented 19 startups’ solutions in MTS. Recollecting from the letter, we created VDome — a platform for digital control of multi-apartment buildings. An optimization platform for new IT-products from Containerum startup has become a part of the #CloudMTS division, having created a new direction there. In addition, based on Redbees startup technology, there was created a development kit for solution developers who deal with NbIOT networks.


How can a startup join the MTS ecosystem?

1. It is possible to get into the MTS ecosystem through the Accelerator. Selections in the Accelerator are held in autumn and spring. The nearest selection is in spring. You need to apply through to get in the Accelerator. After completing the acceleration program, the startup can launch a pilot with one of MTS business-verticals. In the case when the pilot is successful, your solution can be scaled.

2. If you have a ready-made product, your sales and clientele are growing, and a solution is of strategic value to the MTS-ecosystem, your project can be scaled without participating in the Accelerator.

3. If you want to get in the 5G Incubator, you need to apply through the incubator’s website

4. You can offer your project to the MTS venture fund this website.


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