Brent Hoberman, the co-founder of lastminute.com, has pledged to support the creation of 200 tech start-ups in the UK over the next five years.
He said Founders Factory brings a “brand new” rulebook for building a successful business.
Hoberman told the Telegraph: “There are too many accelerators and incubators. There’s a bubble.
“There are too many people hopping on the bandwagon without adding value.”
Each of Founders Factory's sponsors offers “several tens of millions” in funding on a sector-by-sector basis, meaning there is company sponsoring a sector it operates in. A package worth £200,000 is given to each start-up. It includes £30,000 worth of capital, mentoring and business support. Founders Factory takes 7% equity, but takes the entire stake in a company it builds from scratch, with shares given to its managers.
Some have suggested that Founders Factory is copying the model used by Rocket Internet, a similar company based in Germany, which also focuses on start-ups with products or services for the mass market.
“We’re not taking the Rocket Internet model and copying successful e-commerce businesses," Hoberman said. “Our corporate investors want us to do things that are really hard. They tell us that most start-ups just aren’t ambitious enough.”
So how is Founders Factory going to hit its 200 start-up target over the next five years. Hoberman explained that it will start by creating two new companies in each of its four target industries every year, and will accelerate the rest.