KUALA LUMPUR (Apr 10): The founders of AirAsia Bhd and the Tune Group today launched Tune Labs, a start-up incubator and programme that seeks to identify, mentor and fund entrepreneurs in the ASEAN region.
This seed fund programme, which focuses on the travel, payments and retail space, offers two different paths for its applicants — an incubator programme and an accelerator programme — to cultivate their ideas.
Tony Fernandes, Tune Labs chairman and AirAsia's group chief executive officer said there is an internal and external ecosystem for start-up companies to access through AirAsia (fundamental: 0.2; valuation: 0.8) and the Tune Group.
“We are a little bit biased towards companies that would be able to assist AirAsia or the Tune Group of companies,” said Fernandes, adding that the start-up companies and his founding companies may be able to leverage on each other.
Gareth Lim of Tune Labs added that the big challenge that start-up companies face is to be able to deliver its products quickly, efficiently and in a cost effective manner.
“With this ecosystem here, whether its 50 million passengers or the amount of people who stay in Tune Hotels or take up Tune Insurance, the 12 million people on its loyalty data base can be reached almost immediately.
“We can market to them almost immediately and this is a big differencing factor for what we are trying to set up today [compared to] other seed funding companies,” said Lim.
Along with Fernandes, the other founders of Tune Labs are Datuk Kamarudin Meranun and Lim Kian Oon with a 35:35:30 holding in Tune Labs.
The investment team for the seed fund company will be helmed by Arun Verma and Lim, who also has experience within AirAsia and Tune Group.
The founders have invested an accumulated RM5 million in Tune Labs which will be disbursed to the start-up companies.
“Some start-ups may need RM200,000, some may just need advice and some may just need the ability to leverage off AirAsia. It (the minimum fund given to start-ups) really depends. Some businesses cost more,” said Fernandes.
He added that Tune Labs will be taking a certain percentage of shareholding in the start-ups but this will depend on the sort of venture as “there is no firm rule” of the shareholding percentage it may take up.
To facilitate the identification and development of these new ventures, Tune Labs will run two parallel programmes, the incubator and the accelerator.
The incubator programme is a 12-week start-up boot camp that will be conducted three times a year with a targeted initial cohort of 8 participants. The first cohort is expected to commence in June 2015 as the deadline for the submission is May 20, 2015.
The accelerator programme is a variable time-frame programme where start-ups can participate and validate their business ideas.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)