Relationship between Startups & Corporations

In this article, we will learn together:

• Why do corporations need tech companies and startups? What is their goal?
• Why do startups cooperate with large corporations and companies?

Why do corporations need tech companies and startups? What is their goal?

The main purpose of working with startups is because they are like a big machine, a big boat, moving slowly and are actively looking for something new and groundbreaking. The ideas or solutions they find may not be used in their business processes but they are something for their customers, for the broader retail chain.

Or because they lack the money to build their retail stores. They need a solution.

Or because they are looking for a solution to cut spending on some activities related to energy, fuel, human resources…and startups can help them optimize internal processes. and save money, helping them build digital ways of communicating with customers, so companies often start their own innovation ecosystem.

On the other hand, according to many statistics, more than half of large corporations want to launch new products on their own, they do not want to invest or buy a certain company. But it takes them 1-2 years to develop a new product. So, by partnering with startups, they are saving time by investing or acquiring startups. At that time, corporations will have a new team from leader to company management team, they have a completely different business motivation and mindset.

A series of questions we often get from BambuUP are: How many startups has BambuUP worked with?, What are the selection criteria?, and What stage are the startups at?

In theory we started the BambuUP project at the beginning of 2020, we did a lot of research, and worked with hundreds of startups around the globe. We focus on 2 aspects: Idea and Business Model.

The main criterion of Startup is that the product must be specific, not necessarily that it has been launched into the market yet, but it must be ready to launch. Startups need to have a clear vision and business plan regarding the product development process and must know the commercial value of the product.

The second most important thing is the background of the founders and their goals. BambuUP works and collaborates with Corporations and startups to create something new together. We both focus on finding startups, and also focus on finding mature companies with developed products and track records.

Why do startups cooperate with large corporations and companies?

According to Mr. Victor Hoang Thang – Associate Partner I Business Development I Brand, Marketing and Communications I Consumer Sector Leader at EY Vietnam: There are many reasons in which startups consider corporations as supply partners. provide opportunities to access, consult and learn about strategies for mutual benefit in the short to medium term. Large companies can act as first customers for startups, and they also become a source of access to a new audience: their own employees or customers.

Information about customers and resources is a very important factor that startups receive when partnering with corporations: tools, strategies, analytics, infrastructure – things that startups you can’t find anywhere else.

Through the research of many corporations, it is easy to see that they are having a lot of long-term cooperation benefits for them, so they are very interested in developing startups. To some extent, for a startup, problems like lack of capital, lack of support from experienced players or insufficient knowledge of the market will be solved. You can learn from corporations – these companies are often many times larger than any startup. Their experience of mistakes and even successes will certainly come in handy in the growth of a young business.

If it comes to investment, then corporations are likely to buy a small part of the shares (up to 15%), but in the future a formal takeover is not ruled out.

We will continue this series of articles in the next sections. Please keep updated and enjoy reading. Thank you!