CoinJar, a Melbourne-based bitcoin exchange and payment system, has raised $500,000 in seed funding from a range of individual investors and the Blackbird Ventures seed fund. Launched in February by Asher Tan and Ryan Zhou, CoinJar currently has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction. Tan told StartupSmart the funds would go towards enabling their global expansion. They’ll be investing in new hires, including support and technical talent such as Ruby on Rails developers. “A lot of people talk about a bitcoin bubble, but the case is too strong to ignore,” Tan says, adding the investors were compelled by the story behind bitcoin and the use cases. “One of the unique draws of bitcoin is totally people-powered. As long as people remain interested, bitcoin won’t die out.” Tan says while they’d welcome regulation around bitcoin to further legitimise the currency, it was important law makers take the time to understand the scene and potential. He adds creating the right infrastructure and increasing the ease of cashing in and out of the digital currency will boost usage in the coming year. Tan says the investment is a breakthrough for them as it brings credibility to the nascent technology. “It’s not just about the money. We’re very new to this, so the investors are bringing legitimacy to our business. A lot of people ask us how do they know we’re not a scam, so having such well-known and respected investors means people will trust us more,” Tan says. CoinJar received their first funding of $20,000 earlier this year when they took part in Melbourne accelerator program AngelCube. Blackbird Ventures co-founder and serial entrepreneur Niki Scevak led the investment round. He told StartupSmart it was exciting to see Australian entrepreneurs taking on the emerging bitcoin industry. “I love the ambition of the team. Asher and Ryan are remarkable people who are creating something special. They’re committed to being the best in the world rather than just the best here, which is very cool,” Scevak says. He adds while bitcoin is very young and there are significant risks, the founders and the progress they’ve made since launching earlier this year convinced investors. “This is very, very early on in the life of bitcoin. The majority chances are that bitcoin start-up investments will amount to nothing. A lot of bitcoin companies that have achieved success have been hacked, so that’s a big risk because once you’re hacked you’re dead because the trust is eroded,” Scevak says. He adds the investors were excited by how effectively Tan and Zhou had iterated on their offerings, and especially about their development of an API strategy. This technology would speed the uptake of bitcoin. While Tan says he expects bitcoin will become mainstream, but is wary to gaze into a crystal ball and set a date as there are so many variables, with regulation being a predominant one. “I do welcome regulation, provided it’s informed regulation. Governments will need to ask some hard questions, but we’re all doing this for the first time so it’s important we don’t jump into regulation. We all need to develop considered, well thought out plans about something that could be beneficial to the whole world,” Tan says. Pioneering a new technology comes with many challenges, with CoinJar battling the Commonwealth Bank earlier this year after their personal accounts were shut down without warning.
A rental car insurance start-up and a downloadable keyboard replacement app for smartphones have been accepted into international accelerator program Start-up Chile. The two Australian companies are part of the program’s eighth cohort of 85 start-ups that were selected from over 1,500 applications. Tripcover chief executive Desmond Sherlock, who co-founded the business with brother Steve, told StartupSmart that they must have been selected because they’re disruptive. “We are very unsexy, we’re just selling car industry excess,” Sherlock says. “But we’re disrupting the industry. The car insurance companies are very unhappy with what we’re doing because we’re undercutting them by heaps, and they’re really annoyed about that.” The funding will enable the Sherlocks to rapidly scale by launching an office in Chile to focus on the Latin American market and developing their API (code that integrates their offering within other businesses websites and offerings). “We’ve been doing it for nearly two years, and we haven’t got any funding and we don’t do much marketing. But we’re selling 400 policies a month, and it’s doubling every two months so it’s starting to take off,” Sherlock says. “I haven’t been paying myself much and haven’t really been pushing, but now we’ve got a grant behind us we can start really going for it.” Sherlock adds that their track record and previous start-up experiences have shaped their approach to their latest project. “We’re approaching this as low key and practical, whereas before we had a start-up and we tried sexy, and built a bit of buzz and got a lot of funding, but it burned out,” he says. Start-up Chile is a Chilean government initiative, with the 85 start-ups to receive access to mentoring networks, office space, a one-year visa to develop their project in the intensive accelerator process in Chile and US$40,000 of equity-free seed capital. John Lambie, founder of the downloadable keyboard start-up Dextr, told StartupSmart setting up an office in Chile was an obvious step for his start-up, which will be targeting the emerging middle class in the developing world. “I’m not sure if I’ll relocate permanently to Chile, but this is probably a business where I will need to relocate out of Australia,” he says. “This product is for the developing world, so Chile is a great spot because Latin America is a sweet spot for this kind of product.” Lambie says the alphabet interface was already receiving significant interest from telcos and tech manufacturers, as it overcomes the number one usability issue facing emerging tech users. “It’s a faster, simpler text phone entry system for the forgotten five billion. Very few people are as fortunate as us Australians to have grown up surrounded by luxury and devices. They’ve got one piece of tech kit if you go Nigeria, Brazil and Indonesia – it’s a hand phone,” Lambie says, adding the Qwerty keyboard has a learning curve of months or even years. Lambie says seed capital will improve his ability to start meeting and driving demand, as he’ll have a foothold in Latin America and easier access to over 500 million target customers on the South American continent. “I’ve been mostly bootstrapping with a little bit of funding, and milking the AusTrade rebates for all they’re worth. I’ll be looking to start building up a B2B (business to business) sales force team and an internal tech team,” he says.
A 20-year-old entrepreneur has launched an online sales app targeted at the new generation of online shoppers and integrated with social media. Stephen Chapman, founder of the social selling app Facebuy, told StartupSmart the way Gen Y was selling and buying online has changed. “This is a younger generation targeted tool because eBay has been around for a long time and my generation isn’t looking at eBay, that’s for our parents,” Chapman says. He says the app focuses on fashion, concert tickets and textbooks first, as these are the items young people are selling online via Twitter and Facebook. “We’ve created a centralised place to sell these items that feeds straight through Twitter and Facebook, so your friends can comment and promote it,” Chapman says. Launched two weeks ago, the app has been downloaded over 500 times, has 300 registered users and 150 items have been uploaded. “That conversion rate is pretty good. It’s definitely working and we can see potential,” Chapman says. “We’re focusing on a customer-reach model rather than revenue, while we’re still tweaking it.” The app is free to download and users can also list their items for free. For each sale, Facebuy takes a $2 fee and 1.5% of the price plus 30c goes to PayPal. Chapman says they’ll be focusing on recruiting eBay sellers in the next few weeks, especially those who have listed more than 400 items and have good customer feedback. “We’re going to show them it’s a cheaper, quicker, younger and trendier way to sell online, that doesn’t carve their bottom line up,” he says, adding the idea was sparked by his frustration having the pay listing fees on eBay. With a brand similar to Facebook and eBay as its main competitor, Chapman is staying focused on his point of difference. “Yeah, the big giants always want to sue anyone to stop them starting up. I looked into it and I’ve trademarked the word Facebuy in Australian markets, and there was no issue,” Chapman says, adding it’s using the Facebook API (application programming interface), so Facebook knows it exist. “But these big giants are faceless. They can’t have a personality or personal story attached to their brand like I can. We can be more agile and add new categories, and tweak as we go.” Chapman says his focus is on developing the customer base in Australia, and seeking funding and mentoring to expand internationally. “China and Hong Kong will be big for us. Maybe not them selling to each other, but a lot of power sellers on eBay of cheaper products come from there,” Chapman says. Facebuy is also one of 250 entrants in the Million Pound Startup competition, which is run by London-based start-up incubator Digital Shoreditch.
A new generation of entrepreneurs are seeking new online sales payment systems, the founder of an Australian start-up says, as Commonwealth Bank chief executive Ian Narev flagged that regulators may have to examine the move by tech giants into financial services. “There isn’t enough attention being paid to the new generation of merchants,” Grant Bissett, founder of Pin Payments told StartupSmart. “There is plenty of talk about different tools for consumers to buy with, such as mobile wallets and peer-to-peer options. I think these options are probably inevitable as technology continues to grow,” he says. “But it completely ignores new types of merchants. They could be new business models or new geographies, like an Australian selling online to a customer in Hong Kong, those guys are underserved and overdue for some attention.” Bissett says new sales systems and processing systems, known as application programming interfaces, or APIs, are needed. Pin Payment is the first Australian all-in-one API for processing sales, including multiple foreign currency sales. The system was designed specifically for start-ups and entrepreneurs by simplifying the multiple financial and user accounts required to sell online. It combines several functions including the payment gateway, fraud and cyber security systems, currency conversion and users don’t need a separate bank account for it. “Our vendors don’t need a merchant account, which is a big deal for small and start-up businesses,” Bissett says. “We wanted to create something that removed the need for multiple bank accounts and systems. Especially if you’re a start-up and need to sell in US dollars, you also need deep integration with your website backend, not heaps of accounts to manage.” Four months into their public beta, and the team at Pin Payments is getting ready to launch commercially. Partnering with existing financial institutions was the main objective for the team. “Betas are usually about breaking and fixing things. That wasn’t really the case for us. The purpose of our beta was to build confidence with the banks and optimise our processes,” Bissett says. “One thing we learned in beta was about adjusting to the pace of the financial services industry. You can imagine how a tech start-up works compared to a large financial service.” Through the beta, Pin Payment has successfully partnered with a range of large financial services. “This has involved a couple of unique agreements. We have a first-of-its-kind in Australia payment service provider with a major bank for example,” says Bissett. “Moving forward we’re looking to integrate with as many eCommerce products and packages that will make it easier for non-tech-skilled small business owners.” As the internet connects entrepreneurs to more customers than ever before, Bissett is confident that the rapid evolution of payment options will be a boon for start-up operators. “Current start-ups and small businesses are underserved with merchant services, especially those with international plans. That’s beginning to change.”
Australia will play host to its first THack in April, when developers will create and showcase new digital travel products and web or mobile-based tools over the course of just eight days.
A trip overseas was the original inspiration for Stufftopia, which helps people find things to do anywhere in the world.
After picking up not one but two titles at the 2012 StartupSmart Awards, expectations were high for Melbourne-based business Ship2Anywhere, which was created in 2010.
Sensis is to roll out a fresh ‘hackathon’ in Melbourne this weekend, including an impressive list of mentors such as Lonely Planet’s Gus Balbontin and Scott Rogers from Seek.
Australia could risk losing its coveted AAA rating if the federal budget does not return to surplus, a leading credit agency has warned.
It’s been a while since my last post and I feel like I should have written a few more times since then.
Facebook’s disappointing debut on the Nasdaq doesn’t appear to have dampened the company’s spirits, with reports circulating the social media giant is about to make two more acquisitions.
While running their recruitment agency, Patrick Flaherty and Matthew Hughes realised that the hiring process could be enhanced with a healthy dose of video.
Sensis has launched a series of challenges to inspire developers to create viable apps, offering a $2,500 “bounty” for the concept that best utilises its API content and functionality.
Melbourne Population: 4.07 million Start-up survival rate: 74.3% (2007 to 2009)
University students in Melbourne will have just 48 hours to launch web-based start-ups from scratch this weekend, as part of their participation in Startup Hackathon Melbourne.
Australian software giant Atlassian has acquired US-based instant messaging network HipChat for an undisclosed sum, with plans to incorporate HipChat into its ever-increasing portfolio.
Start-up incubator Pollenizer has teamed up with Sensis to host a two-day hackathon later this month, inviting entrepreneurs to vie for a share in more than $50,000 worth of prizes and perks.
eCommerce platform BigCommerce has launched a $2 million integration fund for start-up developers around the world, with each successful entry set to receive up to $20,000.
Global tech company Verizon has unveiled its top 10 technology trends for 2012, with a renewed focus on improving connections between people, equipment and their environments.
Australian search engine Sensis will host a start-up “hackathon” at Melbourne’s York Butter Factory this weekend, in the latest move by a large company to embrace start-up events.