The Death Of An Accelerator: Why Programmes Are Going Bust In Singapore

muru-D’s untimely exit raises concerns about corporate reliance of accelerator models.

- Sandra B. Sendingan

Accelerator programmes have steadily become a mainstay in Singapore’s thriving startup ecosystem. But just like the firms they nurture, accelerators also struggle to find their niche and ensure their own sustainability as they grapple with the same risk of going bust just like the most promising startups.

The sudden closure of the Singapore operations of Telstra backed accelerator programme muru-D in July 2018 illustrates this point quite well. Backed by Australian telco giant Telstra, the accelerator programme was abruptly shut down mere months after completing its third cohort.

Although Telstra did not disclose specific reasons for the shutdown, muru-D Entrepreneur-In-Residence Craig Dixon said in an earlier blog post that the programme’s untimely end was brought about by the “complete reliance on its corporate sponsor.”

“I think relying on one sponsor is inherently risky, the epitome of the adage ‘Don’t put all your eggs in one basket.’ A corporate-backed accelerator is unlikely to be core to the C-level strategy and shifting winds from quarter to quarter can mean the end of even the most successful corporate accelerator,” Dixon told Singapore Business Review. Most of the accelerator programmes in the city state are supported by one corporate sponsor, he added, which may pose a problem as these programmes need to strike the balance between nurturing startups and ensuring that the sponsors are receiving sufficient value for their investment.

The role of corporate entities in accelerator programmes have grown in recent years with the share of accelerators in Asia and Oceania planning on generating earnings through corporate partnerships or sponsorships rising from 57% in 2015 to 66% in 2016, according to the Global Accelerator Report 2016.