No one could have predicted how quickly the Starburst Accelerator would open doors for Arralis, an Irish company that designs microchips for satellite communications systems and millimeter wave radars.
Arralis Founder Barry Lunn gave a 10-minute pitch describing his company’s technology at a December Starburst Accelerator event in Los Angeles. “We hadn’t sat in our seat after our pitch and we were whisked away by one of the big guys, I can’t say who, to talk about a program,” said Lunn, who also serves as Arralis’ chief executive. “We delivered product to them prior to the follow-up event in March.” Since then, Arralis has made deals with four of the world’s top 10 aerospace companies and the firm is preparing to open an office in Los Angeles in July, he added.
Francois Chopard established the Starburst Accelerator in France in 2012 to bolster innovation in the aerospace industry. Since then, the Starburst Accelerator has opened offices in Los Angeles and Munich. A Singapore branch is slated to open later this year.
In each region, corporate partners pay $100,000 a year to attend quarterly events similar to the ABC television show “Shark Tank,” where entrepreneurs make sales pitches for their unique products. The Starburst Accelerator also helps each of its corporate partners identify fledgling companies in their region. For $150,000 a year, corporations gain the Starburst Accelerator’s help searching a worldwide talent pool.
“There is a disconnect between the culture of entrepreneurs and the established aerospace industry,” said Van Espahbodi, Starburst Accelerator partner. “Our overall goal is to let each of them focus on what each of them is meant to be doing.”
The Starburst Accelerator is based on the idea that startups tend to be much better than large aerospace companies at innovation and agile product development because entrepreneurs work doggedly to improve product performance. But often entrepreneurs do not have the type of relationships they need to sell their technology to large aerospace companies or to obtain funding to expand their work.
To bridge that divide, the Starburst Accelerator makes introductions. “We are bringing those two worlds together in a sandbox that allows that conversation to come together, where people can think more creatively about how they can partner,” Espahbodi said. Those relationships extend beyond purchase orders and may include the sale of technology licensing rights, corporation acquisitions or strategic investment.
For example, Astro Digital, a satellite imagery startup based at the NASA Ames Research Park, Moffett Field, California, made its first appearance at a March Starburst Accelerator event in Los Angeles. Through the Starburst Accelerator, Astro Digital is eager to begin building relationships with people at the top aerospace companies and to find aerospace firms that have venture capital funds or strategic investment arms “because we are fundraising right now,” said Bronwyn Agrios, Astro Digital Product Head.
Without the Starburst Accelerator Astro Digital executives would have trouble identifying the aerospace companies focused on strategic investment. “Van [Espahbodi] is helping traditional aerospace think about how they can work with a company like mine,” Agrios said.
Once a startup joins, the Starburst Accelerator staff spends 18 months to two years helping each entrepreneur meet with companies that can offer contracts, partnerships, access to facilities or investment. Startups do not pay to join, but if the Starburst Accelerator helps an entrepreneur secure investment or contracts, “we take a small piece of the deal,” Espahbodi said. “Our growth model is based on success fees.”
The Starburst Accelerator selects startups in each region based on the interests of its corporate partners. Each major aerospace company tells the Starburst Accelerator what type of technology it seeks.
“Aggregating that criteria among all the different sectors and all our corporate partners around the world gives us a much stronger sense of what to keep an eye out for,” said Espahbodi, who helped set up the Starburst Accelerator in Los Angeles in 2015.
The Starburst Accelerator acts like a commercial version of the U.S. government’s Small Business Innovation Research (SBIR) program, said Stan Dubyn, chairman and chief executive for Millennium Space Systems, a Starburst Accelerator corporate partner based in El Segundo, California. “They have created a parallel universe to SBIR by helping small companies get seed funding and by making introductions so we are aware of their capabilities and technologies,” he added.
Boeing Network and Space Systems is another enthusiastic supporter. “The Starburst Accelerator offers a unique opportunity to showcase newmarket entrants and this partnership allows Boeing to work with the organization, along with these new companies, to deliver technology that is valuable to our products,” Erik Daehler, product innovation director for Boeing Network and Space Systems, said by email.
Espahbodi said one of the reasons U.S. aerospace companies were eager to join the Starburst Accelerator was that firms recognized their European competitors already were courting U.S. entrepreneurs. In May 2015, Airbus Group announced plans to establish the Airbus Group Silicon Valley to focus on advanced technology and Airbus Group Ventures, a corporate venture capital fund. Two months later, Thales unveiled Thales xPlor, a technology incubator in Cambridge, Massachusetts, to work with U.S. startups and university research centers on emerging technologies.
“That’s part of the reason we went to American corporates and said, ‘It’s time for you to build that coalition,’” Espahbodi said.