March 22, 2022

Why Telefónica’s Wayra is looking beyond accelerators

10 years since the foundation of Wayra, Telefonica has moved onto venture building, direct investing and the “anti-portfolio”.

Thomas Brown

7 min read

Irene Gomez, open innovation director, Telefónica

Telefónica, the Spanish telecoms giant, is well-known for its Wayra accelerator programme, introduced in 2011 and something of a European counterbalance to the dominance of Silicon Valley. In those 10 years it has helped along some 800 startups who have generated more than €285m in revenues and 10,000 high-skilled jobs. 

But over the last two years it has signalled a shift away from its origins. It introduced Wayra Builder, a venture building unit, designed to capitalise on patents, technologies and ideas from within Telefónica. The unit has created four startups so far, although Irene Gomez, open innovation director at Telefónica, is reluctant to cite successes or financial results just yet, saying it’s “a little too soon”. 

Last September, it also set up a new €250m growth fund called Leadwind, in partnership with private venture capital firm K. The fund, which will lead investment rounds of up to €15m, focuses on deeptech scaleups in southern Europe and Latin America in sectors such as cybersecurity, industry 4.0, future of work, energy, ehealth, fintech, future of the home and mobility.


Telefónica's shift comes amid growing questions in the innovation community over the effectiveness of accelerator programmes and labs. So Sifted felt compelled to ask Gomez: does the company no longer have confidence in the accelerator model? 

“It’s not that we’re leaving one model and starting a new one,” Gomez says. “It’s a matter of evolution.”

While to a sceptic that may sound a little like a non-answer, Telefónica is still investing in their seven Wayra Hubs and has launched Wayra X, a 100% digital hub designed to move it more into B2C areas, which it defines as “mass markets”, focused on areas including 5G, ehealth, digital education and home automation.

But, says Gomez, the innovation ecosystem has changed, and Telefónica's approach has had to change with it. 

It’s not that we’re leaving one model and starting a new one. It’s a matter of evolution

A decade ago when it started Wayra, Gomez argues, the ecosystem was still in a very early stage and Telefónica found itself among the first investors in some very immature companies. But over the last decade, the ecosystem has evolved — and startups with it.

“We’ve found that the maturity of startups has evolved,” she says. “We’ve also identified that we are capable of working with more mature startups, and are actively investing in this area as well.”

This isn’t, then, a case of Telefónica abandoning the accelerator programmes but diversifying how it works with startups and entrepreneurs. 

A means, not an end

Gomez, who took on the role of innovation director just over two years ago, just as Telefónica was beginning to change how it worked, is keen to move away from the hype that has grown around innovation — the branding, the funding announcements, the investment photo-calls, the dizzying promises of new technologies and the hopes of getting in early on a future unicorn.

Gomez strikes a more sanguine, pragmatic tone.

“The open innovation team is a means, not an end in itself,” she says. “We’re a way of creating diversity in the corporation, because diversity is a great way to make things happen differently.

“We are a bridge for cultural change by connecting two worlds, the corporate world and the entrepreneurial one.”


Support (not just) at the very top

One of the ways Gomez wants to create that bridge is making sure there are connections between startups and the corporation all the way down. Often in innovation teams, there is an emphasis on getting buy-in from the top because without the top executive, their innovation and cultural transformation are likely to fall short. 

There’s just as much risk, though, in an over-reliance on the CEO.

“You need the CEO, but not just the CEO,” says Gomez. “You need other sponsors within the business where innovation can make a difference.

“Sponsors and promoters generate change inside the company and they’re key to allowing innovation from the outside world to be accepted.”

Gomez gives an example of when large technology companies and lesser-known startups are competing for work.

Big tech companies often have established and multifaceted relationships with a corporation like Telefónica — they can be both existing partners and customers of the organisation. When an RFP is issued seeking expertise to help solve a problem, there’s often a risk that existing relationships championed by internal stakeholders such as account teams can squeeze out the startup.

Our investment is a way of signalling our confidence in the startup

The added challenge for Telefónica, is that when they invest in a startup, it comes with a commitment to help that startup to do business and grow with Telefónica.

“This highlights the importance of having support from sponsors within commercial teams, not just product teams,” says Gomez. “We don’t recommend every startup we come across, but those we invest in shouldn’t be seen as a higher risk than larger firms.

“Our investment is a way of signalling our confidence in the startup — it’s working with other customers, its roadmap is being delivered, we have a seat on its advisory board. We try and give peace of mind and help a big corporate to take a risk.”

And we’re not talking small numbers here. Gomez cites a significant 270+ startups that have active commercial relationships across the Telefónica group.

OKRs all round

Measuring the effectiveness of innovation teams is always hard, but Gomez has made establishing OKRs (objectives and key results) across her teams a key focus. It is not just to make sure that the team delivers value, it is to give them permission to explore areas outside of Telefónica's core business as well.

We’re looking for nice investments with a VC mindset

“You have to make sure everyone has OKRs, and that they’re joined up,” she says. “Some are OKRs just for the open innovation teams, and some are shared with business units to help create alignment and common ownership.”

Telefónica’s open innovation teams have four OKRs which serve as both a yardstick, and a mandate.

  1. Revenue generation for Telefónica through working with startups — “We measure the value generated for the company annually by making these connections happen, and we agree on the KPIs with the business units so we are aligning with the operation”
  2. A financial return on our investments — “We want to see a return — we’re looking for nice investments with a VC mindset.”
  3. Cultural change, indicated by the number of startups working with Telefónica — “Our aim is to have more and more startups working with Telefonica every year — we measure cultural change in terms of the number of effective connections [between the corporate and startups].”
  4. Future opportunities and technology bets beyond those specified by the company today — “There may be no business unit that can work with the kind of technology or product today, but we invest because we believe we need to deliver these kind of conversations to the company.”

Gomez points to areas such as the metaverse and decentralised networks, where her teams are exploring opportunities and investments that are both outside of the core business, and without a defined need or problem within Telefónica’s businesses today.

“They may not have a fit today,” she says, “but why not in two or three years’ time?”

Embracing risk, looking further out

Another new idea is the “anti-portfolio”.

“The anti-portfolio are the companies where we had the opportunity to invest, but declined for fit reasons,” Gomez explains. “But these were nonetheless super opportunities for investment.”

These not only serve as reminders of how easily short-term thinking can influence even the most established innovation functions, but are also ripe to be revisited without the pressure for an obvious fit in the here and now.

“Corporate agitation for results can sometimes kill ideas which could have a positive impact in the longer-term,” says Gomez.

Her biggest worry is that business can be too focused on the needs of today, whereas as an open innovation unit, “we need to take risks and invest in the tomorrow, even if the business is not prepared today”.

Corporate agitation for results can sometimes kill ideas which could have a positive impact in the longer term”.

Her personal challenge for 2022 will chime with many: “Getting the balance right between listening to the known needs of the business, versus stimulating them with things not on their mind today.”