Itaú harnessing open digital innovation

Tuesday, August 16, 2016

Cubo was launched in 2015 as one of the first open co-working spaces in Brazil, inspired by successful experiences in China and Japan aimed at incubating tech entrepreneurs and digital startups.

The space was set up in São Paulo, the country's financial capital, with the backing of the country's largest private sector bank, Itaú. It also works as a breeder for fintechs, whose solutions Itaú might nurture itself. Since its launch, dozens of startups have flocked to the space.

BNamericas spoke with Cubo director Flávio Pripas about the project's objectives.

BNamericas: What is the strategy of Itaú with Cubo?

Pripas: Cubo is a people's connection site, it's a space that was created to fill a market gap. It's a co-working space where people gather to talk about innovation, entrepreneurship, business models, new ways of working.

Cubo's creators were Itaú and the venture capital firm Redpoint eVentures. Cubo is also supported by several companies, 10 partners in total, including TIMCiscoAccentureMasterCardMicrosoft, Ambev, AESSaint-Gobain and others that we will officially announce in the coming weeks, such as Gerdau.

They support Cubo so Cubo can exist and we can have the greatest positive impact possible on entrepreneurship and innovation markets.

BNamericas: How and why was the initiative born? Does the bank intend to go on absorbing the technologies developed in the space?

Pripas: Every large company currently knows it needs to approach in some way the startups, because this relationship brings a certain status. Furthermore, startups open up new business fronts, disrupt markets and create new behaviors.

This approach of large companies to startups is also important because sometimes hiring a particular provider can be expensive and complex for enterprises, while the startup can solve real world problems in the best possible way.

Quite often, just this interaction with startups is already enough to force companies to rethink their processes and change certain work practices, so they can work better, deliver new projects faster and even enter new markets.

Itaú, as all major corporates, needed to approach and interact with startups and went to see the models that existed in the market. These models, however, did not fit Itaú. In a conversation with Redpoint eVentures, the venture capital firm shared initiatives carried out in China and Japan that changed those markets. Itaú and Redpoint then decided to bring this concept to Brazil.

For Itáu, it was also appealing because it meant the bank could eventually hire one of these companies as a supplier or even invest in one of them if it wanted to. This works for Itaú and also for the other companies that are supporting us, because Cubo was thought to be the most open platform possible.

BNamericas: So there's no pre-contractual relationship between the bank and the startups in Cubo?

Pripas: Absolutely. This is in the project's foundation. Because we wanted a center of innovation that really attracted the best entrepreneurs and the best startups – rather than one desperate to close a deal with the bank, for example – we established that there could be no preemptive rights or investment.

BNamericas: How many companies are incubated today?

Pripas: We have a total of 55 startups in Cubo.

BNamericas: Would you say that the difficult economic times in Brazil propel people to entrepreneurship? Do you see this as a driving factor for startups?

Pripas: All startups that are in Cubo are there driven by opportunity, not necessity. I do not consider that the crisis is a perfect storm for the appearance of disruptive businesses like the ones we have in Cubo. What I see is an alternative to corporates which need to solve a particular problem and then can achieve that via a startup. Besides, the shared economy is a reality. Entrepreneurs working with real problems in the real world will have plenty of opportunity in this arena.

The crisis can actually hinder the development of startups, whose growth could be faster and become more difficult.

BNamericas: What are the main segments aimed at by those startups?

Pripas: The mix of segments is well diversified. We have four fintechs. There are also companies focused on the B2B segment, cloud, marketing and the shared economy.