MYOB co-founder Craig Winkler among early investors, as Practice Ignition raises $650,000 seed funding2:08AM | Friday, 21 February
Practice Ignition, an Australian firm that helps accountants to streamline their interaction with clients, has raised $650,000 in seed funding from investors including MYOB co-founder and early Xero investor Craig Winkler. The new funding will go towards expanding the company’s development team and business team. “Our aim is that all accountants across Australia can use our platform by the end of fiscal 2014,” founder Guy Pearson, told StartupSmart. Other investors include New Zealand-based software developer Trineo, several accountants, and Xero’s vice president of payroll, Stuart McLeod. Pearson, a former accountant, is also behind cloud-based services advisor Interactive Accounting. He says the investors who’ve injected funds into Practice Ignition, which was formed in 2012, were people he’d met through his previous venture. “Pitch to people that know your industry or find someone that likes your solution,” he advises fellow entrepreneurs. “That might be 100 cups of coffee later.” The seed funding was in exchange for around 22% equity in the firm, valuing it at $2.5 million. More than 400 accounting practices in 20 countries around the world are currently using Practice Ignition’s platform to on-board new clients, the company says in a statement. The platform automates the creation and acceptance of legal engagement documents and provides tools to collaborate with clients, as well as giving firms the ability to offer real-time quotes and turn traditional websites into a service-based check-out system. Craig Winkler said in a statement that he invested in Practice Ignition because its cloud platform enables accountancy practices to scale up their businesses by automating workflow, invoice and payment tasks. “Practice Ignition re-invents and streamlines the collaboration between advisor and clients, while dramatically reducing administration costs for accountants,” he said.
Ollo Mobile has won a trip to Silicon Valley after beating nine other start-ups in the Small Team, Big Impact competition in Sydney last night. The pitching competition was coordinated by cloud technology computing company RackSpace. Ten start-ups with fewer than 10 team members were selected to compete. Ollo Mobile is a new device and system for panic buttons, which elderly or unwell people can use to alert family members and health authorities when they need help. The other finalists were OpenLearning, Food Orbit, Projectia, Annexium, AuthoPay, Revolutionise, Clipp, Digital Sorbet and Geepers. The start-ups pitched to a judging panel of Mick Liubinskas from incubator Pollenizer, Kim Heras from start-up network PushStart, Ruslan Kogan from Kogan Electronics, Chris Ridd, the country manager from Xero, and Robert Scoble, Rackspace’s international start-up liaison. Scoble told StartupSmart he was excited to see an ecosystem beginning in Sydney, but Australia needed to do more to support entrepreneurs. “San Francisco and New York have ecosystems, as do Tel Aviv, Beijing and Seattle. London kind of has one and Los Angeles is being built. It looks like Sydney has a good one underway. These ecosystems need to keep the geeks in town, or they leave and go somewhere else,” Scoble says. Despite the growing ecosystem, Scoble cautions Australian struggles with employee share schemes (ESS) are a fundamental issue that needed to be overcome quickly. “The laws here aren’t letting start-ups use their stock options and equity to motivate people to shelve their jobs at big companies and come and join start-ups,” Scoble says. “Australia needs to deal with this quickly to support your entrepreneurial talent, or they’re going to leave and take their value with them.” The federal government announced a review of ESS opportunities in June. Scoble adds start-ups need access to money, talent, public relations and business expertise to get their companies to the point they’re turning over billions. “When you’re in San Francisco there is such a strong future culture, you can see it in the streets with people trying new things,” he says. “You need access to the idea that your plans are possible and a city with a great culture that encourages that.”
Melbourne-based payment system start-up Pin Payments has acquired the subscription payment management service and customer base of US-based Spreedly. The acquisition opens up a global network of payment gateways and clients for the start-up which only came out of beta in May. Pin Payments is Australia’s first all-in-one payment system, while Spreedly is a subscription management system. Business development manager Chris Dahl told StartupSmart the acquisition was easier because the two company visions were aligned. “Spreedly is a US-based company following a similar mantra to Pin, in that they're trying to better enable online credit card transactions for businesses,” Dahl says. “Spreedly were working with a couple of global partners, but now they’re with us, it means our client base is global overnight.” Pin Payments was a customer of Spreedly, which was shifting its focus to other products. Pin Payment customers kept requesting a subscription system, and Dahl says the suggestion to buy Spreedly came up in discussions and made a lot of sense. This is the first acquisition for Pin Payments, which has also partnered with leading online store platform Shopify and is also working with accounting software company Xero. “The acquisition was funded mostly through existing capital, with a trailing revenue share between Pin Payments and Spreedly. We expect revenue generated through the subscription business to pay back the cost of the acquisition within a year,” Dahl says. Dahl declined to say how much the acquisition cost. Dahl says the rise of software-as-a-service style businesses has made subscription models increasingly common. While Spreedly managed the subscription model, it still required a payment gateway, so clients required a merchant account. “Our product removed the pain point of having to go and work with the bank and have an approved merchant account. But it didn’t make it really, really easy for businesses to build a subscription business model. But this acquisition means that now they can,” he says, adding that the acquisition means time to market has been drastically reduced again. Dahl says the strategic investment enables Pin to offer a comprehensive subscription management service on top of their existing system. He says Pin Payments will continue to invest and innovate in the service and will be launching the company in New Zealand in the next few months.
Reckon is aiming to shake up the Australian accounting software market when it launches its first cloud-based product Reckon One in the next quarter.
Dan Norris was inspired to set up Informly whilst working in his previous company, a website design agency.
A venture capital firm backed by PayPal co-founder Peter Thiel has teamed up with another investor to pour US$49 million into New Zealand-founded start-up Xero, increasing the total amount raised to date by the cloud-based venture to US$67 million.
Peter Thiel has set up a $40 million venture capital fund in partnership with the New Zealand Venture Investment Fund, which could be open to Australian start-ups prepared to relocate.
Accountancy software company Xero has raised $15 million to fund global growth and has made its first acquisition for the year, snapping up Max Solutions in a deal worth almost $5 million.
Xero investor and serial entrepreneur Rowan Simpson has invested an undisclosed amount in New Zealand start-up Go Vocab, which plans to internationalise its online language platform.
Australian tech start-up Paycycle, which provides online payroll services, has been snapped up by accountancy software firm Xero for $1.5m, just two years after the company was launched.