by Vera Lye, Web in Travel
COVID has given Velocity Ventures new impetus to forge ahead with its travel and hospitality fund, and the firm is targeting to raise US$20 million by December 2021.
Nicholas Cocks, founder and managing partner of Velocity Ventures, said, “When we thought about the kind of disruption Covid would bring to the travel and hospitality landscape, we realised there was probably an even greater need for something like this..”
He sees the timing as more of a blessing than a curse even though admittedly, raising funds at this time has not been easy.
With co-founder Patrick Imbardelli, a hospitality veteran, Cocks believes that Velocity brings domain expertise and relevant networks to the industry, and puts it in a strong position to match corporates with startups.
Hence, it has created a corporate partnership scheme, reaching out to large establishments across five verticals – retail, entertainment, food and beverage, transportation, travel services. For its partners, Velocity puts together a report on these five verticals, with a summary of the startups it has seen in each vertical, including the innovative solutions that it would see from the startups.
“We came up with this idea when we realise we were sitting on this wealth of information and so we developed a corporate partner programme to provide them a window into this innovative world we are looking at. We give them those reports on a complimentary basis and also an opportunity to co-invest with us in our fund and in the startups,” said Cocks.
“Comfort Delgro, for example, would have loved to have seen that Grab was coming, and it might have appreciated reading about it in a report,” added Cocks.
While its corporate partners have not had any investments made yet, Cocks sees these partnerships as an affirmative “pay-it-forward” step.
“We want to develop the relationship with the corporates by sharing information. If they choose to invest, that’s great. If not, it’s still a win, because we will have those pre-existing relationships with the corporates, and can help the startups to get introduced; the corporates can potentially offer opportunities for startups to do proof-of-concept trials. It creates a little mini ecosystem, which is valuable to everyone involved,” said Cocks.
Cocks claims this programme puts Velocity in a unique position and the corporate partnership initiative is “gaining good traction”.
“At a time like this, corporates are adjusting to COVID, like we all are. While a lot of them are not in investment mode, they realise the landscape is shifting dramatically so they want the innovation insights that we have. This cycle and situation will not last forever – corporates will get back into investment mode, and we will work our way out of this. And that will be the opportunity for us to co-invest with some of these corporates in the startups.”
Cocks encourages startups to build a culture of adaptation as a way to future proof.
“The concept of trying to future proof yourself is a pretty difficult one. But the companies that are doing well are the ones that have built a culture of adaptation. They are the ones who have been able to move with the times and deliver a product and service that is really needed,” he said.
“That needs leadership from the top. My message to startup founders would be to embed that culture of innovation right from day one. This will be particularly important in our space in travel and hospitality because it is going to look so different when we come out of this; what might look like a pathway to success today may not be a pathway to success in the future,” he added.