Qualcomm Ventures’ QPrize Competition Draws Broader VC Following
When Qualcomm Ventures unveiled the QPrize competition in 2009, Nagraj Kashyap told me a key factor in the decision to create an incentive prize was the evaporation of venture capital amid the liquidity crisis that followed the financial meltdown of 2008.
Kashyap, who heads Qualcomm Ventures, says the need for startup funding is less acute nowadays in the United States. “But outside of North America, there still is clearly a need for this,” especially in places like China, India, and Brazil. Kashyap says he’s also heartened that the competition has attracted a broad following among venture investors.
Qualcomm, which oversees the international prize competition through its venture arm, recently named an Israeli startup, iOnRoad, as the grand prize winner of the third Qualcomm Ventures QPrize. The startup developed a mobile app that enables a smartphone to serve as a dashboard-mounted “personal driving assistant” that monitors speed and traffic conditions and warns motorists when they are driving unsafely—basically an electronic version of a backseat driver. The app includes telematics and a video recording feature that can be used to capture and replay traffic accidents.
After winning $100,000 in venture financing in a regional competition, iOnRoad won an additional $150,000 as the overall QPrize winner.
“From Qualcomm’s perspective, we want to drive innovation throughout the mobile sector,” Kashyap says. “We want the mobile phone to be the center of your life.”
The first stage of the competition is conducted on a regional basis. The competition winnows the field in each region to a group of finalists, which typically ranges from six to 10 companies, Kashyap says. The winner is awarded $100,000 in the form of a loan that converts to preferred shares of the startup in their next round of equity financing.
While Qualcomm describes the QPrize as an annual competition, Kashyap says the cycle is more like 18 months because variations in seasonal holidays around the world make it hard to get everything done in one year. The winner from each region, selected mostly at the end of 2012, advanced to an invitation-only event hosted by Qualcomm Ventures at the Kenzo Estate winery in Napa, CA.
Over the past four years, Qualcomm Ventures has expanded the competition from four global regions to eight. Other regional winners of the 2012-13 QPrize are:
—North America: MightyText, an Android-based app that enables users to send text messages from their computer or any device via the cloud.
—Brazil: Zoop, a startup developing low-cost mobile commerce and payment technology that accepts chip and PIN cards, magnetic stripe payments, and mobile wallets.
—Western Europe: Everplaces, a Danish startup developing technology that allows users to save and share places they love and create a personal travel collection.
—Eastern Europe: Pult, based in Estonia, enables smartphones to be used as an ID and remote control to stream personal and commercial content to connected screens.
—India: Deck App created a free mobile app that enables users to easily create presentations.
—China: TouchAir is developing virtual reality and augmented reality technologies for use with eyeglasses and that use a 3D natural user interface to create a total immersive experience.
—South Korea: Easy Works created a talent based social networking app and service.
The QPrize was intended to provide very early stage funding, and Kashyap says the competition itself has been attracting venture capital investors. Of the 10 startups to win regional competitions during the first two QPrize contests (four in the first competition and six in the second), Kashyap says nine companies went on to collectively raise a total of $65 million in Series A funding from venture investors.
Kashyup says “it’s really heartening” that Qualcomm Ventures has been able to leverage $65 million in follow-on venture funding from its own investment of less than $2 million. “All this shows is that the program is really doing what we wanted it to.”
The third QPrize competition “has been successful by any metric,” Kashyap says. “Companies that have gone through this program have been our best ambassadors. It’s been very heartwarming for the whole team.”