This accelerator wants to break Google and Facebook’s stranglehold on mobile

MOX managing director William Bao Bean at the accelerator’s second batch graduation. Photo credit: MOX.

Taiwan-based accelerator MOX (or the Mobile-Only Accelerator) held a demo day for its second batch of startups yesterday in Singapore. The program, part of US-headquartered venture capital firm and accelerator runner SOSV, targets the “last four billion” of mobile users in emerging markets.

MOX works with startups that make mobile apps and services, and focuses on Southeast Asia, Eastern Europe, and South America.

As it targets mobile app makers, the accelerator has found it has to throw down with Google and Facebook, the two main forces that determine what content floats to the top.

See: Meet the 8 startups that pitched at the MOX demo day in Taipei and Singapore

“In the US you have the 99 percent and the 1 percent, on the internet you have the 99.9 percent and the 0.1 percent,” says William Bao Bean, MOX managing director and SOSV partner. The latter are the people who make any money on mobile, he adds.

“We don’t even see venture capital backing apps so much anymore because it’s just a money transfer from the VC to the startup and from the startup to Google and Facebook,” William laments.

To break this distribution stranglehold on mobile, MOX is trying to put together a consortium of companies that are feeling the same pressures. This includes companies like mobile phone brands, TV networks, and independent app stores. William isn’t ready to provide more details or name any participating companies at this point.

Work in progress

The accelerator was originally meant to have one more startup batch during summer 2016 but chose to take a break and iron out some kinks.

One key lesson it learned during that process? “When we say low-end phones, they’re really low-end phones,” he laughs. For its first batch, the accelerator wanted to find apps and services that worked on cheaper smartphones – ones more likely to be found in emerging markets, where MOX claims to offer startups access to a user pool of 130 million.

Turns out, they overestimated even those devices. So now, participating startups need to make their apps under 10MB in size, able to work in unstable networks, and more data-friendly.

We don’t even see VC backing apps so much anymore because it’s just a money transfer from them to Google and Facebook.

MOX splits its investment in participating startups into equity-based investment and services provided. It generally pours US$40,000 in funding into each startup and spends US$60,000 on incubation services (like resources, office space, and operating costs) for a total of around US$100,000 per startup. It also does revenue-share agreements.

In return, it determines equity based on company stage and potential revenue. It takes an average equity stake of 6 percent in younger startups. For later stage businesses, the stake can be lower. For larger companies, different approaches can be taken, like results-based partnerships.

The pitches