Australia has long punched above its weight in sports, and now a new accelerator aims to help Australian sports technology startups excel. The Australian Sports Technologies Network (ATSN) has launched HeadStart, an accelerator that aims to incubate and invest in up to 40 new sports technology and information technology startup businesses over the next four years. Headstart will offer investments in the $20,000 to $50,000 range, for an equity stake ranging between 10% and 15%. Headstart is based in Geelong and is the culmination of three years’ of investigation by the ASTN. ASTN chair James Demetriou says Australia is well suited to the sports technology industry. “We have a competitive advantage in medical technology, health technology, ICT and in smart apparel and wearables,’’ he says. “One thing about Australia is we are comparatively strong throughout the world in sport, we accept we’ve got great sports people, great sports coaches, great sports innovators. “What we think now from our research, and anecdotal evidence, we can grow the industry to be worth over a billion in Australia.” Demetriou says ASTN also plans to launch a follow-on funding program, which will help the best graduates of Headstart. The program will be based on the AngelCube model, and AngelCube founder Adrian Stone is part of the Headstart team. Demetriou says it’s the first accelerator of its kind in Australia. “What we’ve tried to do is develop a sports technology and ICT accelerator, the first in Australia and probably the region, we’re not going to duplicate what’s already out there,” he says. “It’s based on very clear research, we’ve been validating and searching, and now we’re confident we’ve got the right model going forward.” Seven startups have already commenced the program in a non-investment intake and while Demetriou couldn’t give specific details about the startups he says they’re involved in wearable technologies, sports governance platforms and unmanned aerial vehicles or drones. The establishment of HeadStart was supported by funding from Enterprise Geelong and the Department of Employment. Demetriou says the accelerator will bring its first batch of 10 startups onboard in the coming months. At the HeadStart Accelerator Program launch with James Demetriou Chair of the Aus Sports Tech Network. @DarrynLyons pic.twitter.com/74riWng6bq — Geelong Mayor (@Geelong_Mayor) June 30, 2014
NICTA, Australia’s information technology and research centre, will continue to focus on being a wealth generator rather than a revenue maker, in light of looming funding cuts, according to CEO Hugh Durrant-Whyte. Last week’s federal budget confirmed that the government would only continue to help fund NICTA until the middle of 2016, a move the organisation had been expecting since late last year. While NICTA doesn’t rely on government funding, Durrant-Whyte says losing government contributions will certainly have an impact on the organisation. He says NICTA’s primary goal is “getting good technology out the door” and building wealth for the country rather than revenue for itself. “You would hope at some point you would get enough licensing income, corporate revenues, company sales to keep doing that,’’ Durrant-Whyte says. On average, NICTA helps create a new startup every three months. Last week it sold a company for more than “an eight figure sum”, although Durrant-Whyte would not elaborate on the details. “Last year we spun out four companies, Saluda Medical being one, we probably put about $10 million into developing it,’’ Durrant-Whyte says. “It is producing a medical implant that in principle can eradicate pain in the legs and back. “It has the potential to be the next Cochlear [Australian maker of hearing products].” After NICTA has got startups off the ground, by the time they make it to market, and after the company has raised more funding through investors, NICTA takes a relatively small cut. “Let me be clear here, we already get a significant amount of revenues from external sources,’’ he says. “The problem is none of that ever really allows you to fund the blue sky deep scientific research to come up with all this great stuff to start with.” To help build the expertise required to commercialise some of that ‘blue sky research’ NICTA recently set up an office in San Francisco. “Why did we start it? In the end what we lack in Australia truthfully is the skills and experience to figure out how to commercialise deep technology,’’ Durrant-Whyte says. “Opening up that office is really a chance to say to our startups ‘go and find out what the rest of the world is doing’.”
Tennis Buddy an app that promises to help users find a tennis partner in less than 10 minutes is billing itself as “Uber for Tennis”. Co-founded by Australian-educated entrepreneur Marius Kraemer, Tennis Buddy is a location-based app that enables users to find strangers close by and available to have a game of tennis. The app is available in both Apple’s App Store and Google Play. “When building Tennis Buddy, I wanted to especially help busy people such as business travellers who often only have a two hour window of spare time that opened up due to a cancelled meeting for instance,’’ he says. “With a user base of over several hundred users in cities like London, Sydney or even 900 in LA already, the broadcast always finds that one person who is available at that very moment. “This is what makes Tennis Buddy so fast, as it brings down the average response time for a broadcast to under 10 minutes.” Kraemer studied a Masters of Information Technology at the University of Sydney, during which he launched his first startup, Matewire, a local events finder which was backed by Australian accelerator Pushstart in 2012. Kraemer, who was studying in Australia on exchange, struggled to find and market-fit for the product and, coupled with visa troubles, had to shut Matewire down. His latest effort was co-founded with Sophia Vogt, a former professional tennis player, and together they’re chasing the lucrative US tennis industry. He says he was inspired by Uber’s ‘get what you want at the press of a button’ mentality. “Similar to Uber, which is going after the $10 billion US taxi industry, we are going after the $5.6 billion US tennis industry,’’ Kramer says. “By the end of the year, (we) aim to have 500 users in over 100 cities each, so that we can connect people across all the international cities of the world.”
I’ve just returned from CeBIT after three days and, I have to say, I’m a bit dazed and confused. As a first-time CeBIT attendee, I thought I’d reflect on our experience to help other startups evaluate if the event is right for them in 2015. What is CeBIT StartUp? CeBIT Startup is a part of CeBIT: a large-scale tech event that began in Germany and is considered a barometer of the state of the art in information technology. The startups were all hosted in “StartUp Alley”, placing us side-by-side with over 100 other startups. Why did we go? I am the director of marketing for Mapely, a startup that recently graduated from ilab. We had a sponsored stall so there was no financial cost for us to attend, just the loss of our team from the office. Being from Brisbane, it was also an opportunity to line-up meetings and do the “Sydney” thing. What sort of people attended? This year the organisers had to make a decision between hosting at Pyrmont and Sydney Olympic Park. If you missed one of the three express trains in the early morning, it was a 35-minute cab ride from the CBD – much too far to pop out to on a lunch break. For us, this meant we had fewer tourists and more people genuinely interested in what we are working on, so for B2B it’s not a bad range of attendees. I’m not sure what impact the location had on the attendance of key decision-makers, but for us, we had a fair number come past our stand. For businesses in a specific niche, you would need to have a game plan for how you were going to make CeBIT work in your favour and how to weed out the time-wasters. For B2C startups, conferences probably aren’t the best way to reach the masses anyway, but it could be useful for user-testing and feedback. The pitch event This event was nothing short of bizarre to me. Like everyone else, we had been asked to register our interest in the pitch event. The first questions I had were who are we pitching to and what are we pitching for? Don’t get me wrong: I’m all-for a good pitch event. But I have to be conscious that at the stage we are at in our startup, I need to make sure I am not wasting my CEO’s time pitching for pitching’s sake. Unless there is a clear outcome, the investment that goes into creating a pitch relevant to both the audience and the prize is potentially a misuse of our company’s time. And if we are unclear of our goals, it can be embarrassing. It was with overwhelming sadness that I discovered the prize pool was Airbnb vouchers: $2000 for first prize and runner-up prizes of $1000 each. It's a bit of a slap in the face to know that there's a hackathon happening a mere 50m away with a $10k prize pool. Most startups took the opportunity to ignore the prize pool and make the task relevant to their current needs. Maestrano CEO Stephane Ibos used the opportunity to pitch their expansion to the US. “Maestrano is aiming to raise money to expand to the US and we’re asking for a $5m Series B to fund our US expansion: funding the needs for a US workforce, 24/7 support, US office and funding marketing for growth in the US,” Ibos pitched. Despite not commenting on how they would use the Airbnb vouchers during the pitch, Maestrano still managed to score a runner-up prize. Massive credit is due to the winners: grand prize winners Mathspace and runners up Workible, Maestrano and Caremonkey. Great startups with great pitches deserving much better than this very mediocre prize. Nat Bradford from BlueChilli said you should come to CeBIT with a clear goal in mind and that for most startups it’s about raising awareness of your business. “It’s nice to pick up sales here and there, and it’s nice to meet the right people, but it’s generally to see what else is going on in the ecosystem, know who is doing what in your space and to share the news about your startup and your business plans,” he said. Was it worth it? For us, it was definitely worth attending. This was a surprise: we had low expectations and came away with a good number of strong leads and confidence in our business. We met with other startups and having a pool of so many in one location was really useful for us. There were a few minuses: the time and monetary cost of travel if you can’t use the three express trains, the energy it takes to run a stall and be “on” for three days straight, and the overall feeling that CeBIT StartUp could have been a bit better supported by the organisers. Some businesses did not last the three days, with at least 10 stalls with no-shows on the Wednesday. But for us it was worth it and I would hope that over time CeBIT StartUp grows into a must-attend startup event.
Controversial tech entrepreneur Kim Dotcom has announced the formation of a new political party, known as the Internet Party, ahead of New Zealand’s next general elections in September. German-born Dotcom is best known as the founder of the controversial file sharing website Megaupload, for which he was indicted in the US on charges relating to piracy. Since then, he’s gone on to launch a new venture, a highly encrypted cloud storage service called Mega. His new party’s positions include delivering cheaper high-speed internet, better oversight of spy agencies, opposition to the Trans-Pacific Partnership Agreement, copyright reform, the introduction of a digital currency and the introduction of a digital bill of rights. However, Dotcom is far from the first tech figure to turn to politics – with some having more success than others. StartupSmart looks at five other high-profile tech figures from the tech world who have gone on to their hand at politics – often with mixed results. 1. Julian Assange, Wikileaks Party Should Dotcom’s party get off the ground, his political career will inevitably be compared with that of Julian Assange. Assange is best known as the founder of whistleblower website Wikileaks, along with a long-running series of court cases relating to rape allegations in Sweden. Since August 2012, facing the threat of arrest, Assange has been granted asylum in the Ecuadorian embassy in London. After being granted asylum, Assange announced plans to form a Wikileaks political party. The Wikileaks Party contested the 2013 federal election, but only received 0.66% of the vote. Along the way, several high-profile candidates, including prominent academic and former Wikileaks lead Senate candidate Leslie Cannold, abandoned the party. 2. Ross Perot, Reform Party A far more successful minor party campaign was run in the US by Texan tech entrepreneur Ross Perot. Perot got his start in the tech industry all the way back in 1962, when he launched an information technology equipment company called Electronic Data Systems. Perot eventually sold the company to General Motors in 1984, which in turn sold the company to HP in 2008. It was around the time of the sale to General Motors that Perot met another young tech executive named Steve Jobs. After being ousted from Apple, Jobs had launched a new tech startup called NeXT, and Perot decided to make an investment. The products Jobs’ company developed included an operating system called NeXTStep, which would eventually form the basis of Mac OS-X and iOS after Jobs returned to Apple. Perot also sold another venture – Perot Systems – to Dell in 2009 for $US3.9 billion. Of course, these days, Perot is best known for standing as an independent third candidate in the 1992 US presidential election against incumbent George Bush Snr. and Democratic Party candidate Bill Clinton. The Texan stood on a platform combining a mix of policies mixing positions traditionally advocated with the left and the right of US politics. For example, Perot advocated a balanced budget, a tough stance on drug policy and opposition to gun control. However, he also advocated in favour of abortion rights, protectionism, an end to outsourcing and a strong Environmental Protection Agency. Perot ended up winning 18.91% of the vote, an incredible result for an independent presidential candidate in the US. He stood a second time in 1996, picking up 8% of the vote against President Bill Clinton and Republican candidate Bob Dole. Story continues on page 2. Please click below. 3. Rickard Falkvinge, Pirate Party Of course, when it comes to Kim Dotcom, perhaps the best political role model to follow might be Rickard Falkvinge. Falkvinge grew up in the Swedish city of Gothenburg, next door to the home ground of football club Västra Frölunda. Falkvinge’s biography reads like a list of tech entrepreneur clichés. He got his first computer, a Commodore VIC-20, when he was just eight-years-old. By the age of 16, he had launched his first tech startup, a company called Infoteknik. At the age of 18, Falkvinge hired his first employee. More than making profits, Falkvinge was motivated by the free exchange of ideas that came with the early home computer market. He grew increasingly concerned that harsher copyright laws being lobbied for by the motion picture and record industries could stifle online innovation. His concerns about patents, copyright law and file sharing restrictions led Falkvinge to form a new political party. On January 1, 2006, he launched the website of his newest venture – dubbed the Pirate Party. While the new party managed just 0.63% of the vote in its first Swedish elections, it grew to 7.13% for the 2009 European elections. The pirate party model was mirrored internationally, including in Australia. On January 1, 2011 – five years after its launch – Falkvinge stood down as party leader, handing control to his deputy, Anna Troberg. 4. Malcolm Turnbull, Liberal Party In Australia, the most prominent example of a (far less controversial) tech executive turned entrepreneur is communications minister, Malcolm Turnbull. Before entering into federal politics, Turnbull has served in many roles, including as the general counsel to Kerry Packer’s Consolidated Media Holdings, the cofounder of law firm Turnbull McWilliam, the chair of the Australian Republican Movement, a journalist and a partner at Goldman Sachs. Turnbull became the chair of pioneering Australian internet service provider OzEmail in 1994, also becoming an investor in the company. In 1999, at the peak of the ‘90s tech boom, Turnbull sold the company to US telco MCI WorldCom. In 2004, Turnbull won the by-election for the federal seat of Wentworth, being elected as the local Liberal Party MP at the general election later that year. Since then, he has served as the environment minister in the Howard government, as well as the leader of the opposition. 5. Paul Fletcher, Liberal Party These days, Paul Fletcher is best known as the Liberal MP for the federal seat of Bradfield, as well as a parliamentary secretary to the minister for communications. It’s a position he’s held since December 2009, when he won the seat at a by-election after former opposition leader Brendan Nelson retired from politics. However, before entering into politics, Fletcher served as a senior executive in one of Australia’s largest telecommunications companies Optus, between 2000 and 2008. After stepping down from the role, Fletcher authored a book titled Wired Brown Land? Telstra's Battle for Broadband, which dissected the case for Telstra being allowed to build the national broadband network. He has also run a strategic consulting business focusing on the communications industry, and also served as the chief of staff to former communications minister Richard Alston.
The start-up founders who graduated last night from Queensland’s ilab technology incubator Germinate program have had an intense three months of planning and pivots. This is the fifth intake to graduate from the program in two years. All 10 start-ups selected for the program graduated with a demonstrable product. Program director Bernie Woodcroft told StartupSmart the diversity of the entrants was the most exciting element of this graduating class. “Seven of the start-ups had founders who were juggling mortgages and kids but still wanting to deliver an entrepreneurial outcome. I find that very impressive.” Two of the enterprise start-ups have trials confirmed with major corporations and several start-ups will be receiving some of their first payments in the coming months. “Most of the start-ups will stay on in the ilab space from now without the accelerator program wrapped around them,” Woodcroft says. Navigation algorithm start-up CB AeroSpace co-founder Michael Creagh told StartupSmart the best thing he learned was that mastering the technology was only one factor in the business success. “The business solution will need a marketing strategy, a network of people, intellectual property protection and involving the professional world from markets to accountants to lawyers,” Creagh says. The start-up will enable a much cheaper version of existing navigational systems. Creagh says the increasing uptake of drones bodes well for the commercial potential of the start-up. “As someone from a technical background, the biggest challenge for me was narrowing down all the advice and filtering through many different opinions to work out what to do,” he says. “In the end I went half with my gut feeling, and the rest from weighing people’s input based on their experience in this area.” The program is funded by the Queensland government and part of the University of Queensland’s commercialisation arm, UniQuest. They recently launched a $1.5 million fund for the program in partnership with Artesian Ventures. In a statement, the Queensland Minister for Science, Information Technology, Innovation and the Arts, Ian Walker, said technology start-ups will be agents for diversification of the Queensland economy. “As a government, we need to create the best environment we can to help get new products, services and innovative processes to market,” Walker said. Applications are now open for sixth intake and close April 8. The team behind ilab also recently ran a rapid, mass mentoring event for start-ups in the Indooroopilly area.
A co-working space for start-ups in the advanced technology industries such as medical devices and nanotechnology has launched in Melbourne. The Tap co-working space is an initiative of the Small Technologies Cluster, which has been running an incubator for similar start-ups for years. STC’s head of marketing and business development, Laura Faulconer, told StartupSmart while start-ups all face similar challenges, advanced technology start-ups face complicated hurdles such as regulatory approval. “We were looking at the emergence of co-working spaces globally and really recognise the value in that, but didn’t see any in Melbourne that really catered to the needs of the advanced tech sector,” Faulconer says. “If you’re a medical device start-up, it’s not as useful to set opposite to someone who is selling shoes online. There just aren’t the same synergies to work together.” The space can fit up to “30 butts on seats” at any one time, but Faulconer says 30 is a conservative estimate of how many people will use the space as the majority of it will be flexible. They will also run networking and education events in the space. “We designed it promote that collaborative work environment that has been embraced by the digital start-up sector, but has been slower to emerge here. Some of that is about culture and personality of the people involved, so we’ve taken that into consideration when designing the space,” Faulconer says. Advanced technologies also include biotechnology, life science and information technology.
When investment tool SelfWealth went looking to raise around $3 million to bring its information technology in-house, it considered but then rejected accessing venture capital sources. While it may be the dream of many start-ups to progress from early stage investment from angels to larger funding from the venture capital sector, for SelfWealth managing director Andrew Ward it wasn’t the right fit. “The valuation they put on the business was a lot lower than we thought,” he told StartupSmart. “And their position on being strict on exits and potentially taking on debt made my board nervous.” So instead of going down the venture capital path, SelfWealth “turned on our heels” and went back to its early backers, including carsales.com chief executive Greg Roebuck, and other high net worth individuals. The strategy is paying off for the company, which allows users to build and compare investment portfolios with others and has been described as the “Facebook of investing”. It’s added 10 new investors, raised $2 million with another $1 million expected in the near future. Ward advises other start-ups that don’t want to take on venture capital funding to go back to their original investors. Also, when pitching for series A funding, let new potential investors know who’s already invested. “When we went back to our strategic investors it all happened quite quickly,” he says, adding that previous investors were happy to talk to others about why they invested in the company. Among the 10 new investors to come on board is Australasian Wealth Investments, an ASX-listed investment fund. Last year, SelfWealth raised $1.6 million through the Australian Small Scale Offerings Board, with 21 investors taking part in the raising. Ward also suggests that other start-ups seeking investment not take money “for money’s sake – although you can get desperate”. “You don’t want to take cheap money, you want smart money,” he says, urging founders to ask how potential investors can add value to the company. “I know every one of our shareholders,” he says.
Fed up with the waste and expense of unused building materials going into landfill, builder Neil Turrell and wife Leisa came up with the idea of an online platform to buy and sell construction site leftovers. Since launching in October last year, buildBITS is now receiving around 61,000 visits a month as tradespeople, many of whom are sole traders, seek out second-hand goods or put up for sale excess material they want to get rid of. “It’s bringing the industry together without treading on toes,” Neil told SmartSolo. BuildBITS allows tradespeople to list on the website for free items like doors, windows, steel, timber and bricks they no longer need which other tradies can search for and buy. Neil says the site does not take a cut of any purchase but takes advertising from building industry suppliers, which allows the site to be free for users. He says with the building industry in Australia currently in a slow spot, builders and tradespeople have been attracted to buildBITS for materials as they seek to keep costs down or make a few dollars by selling what they no longer need. “It’s easier to sell than to throw out,” Neil says, adding that disposal costs in Australia are “through the roof”. He says he came up with the idea for the website while he was pulling out a kitchen – “it was beautiful” – and thought it was a “joke” to throw it out. Neil asked a friend who was involved in the information technology industry to investigate his idea. “He said it’s a goer,” Neil says. “Because things are so tight in the building industry and while things are a little quiet, I thought I’d have a go.” He says he’s been “pleasantly surprised” by the positive reaction to the site by tradies, with the number of products being placed on the site growing by around 11% a month. Neil says the next step for the site is to redesign the home page to make it easier and simpler for users.
Mobile video start-up Incoming has highlighted the demand for mobile video content after securing $1.1 million from OneVentures, NICTA and the US-based Citrix Startup Accelerator. Incoming, led by chief executive David McKeague, specialises in mobile content delivery for mobile platforms, delivering high-definition video to mobile devices based on user preferences. It pre-loads content using available WiFi networks, eliminating the need for streaming or buffering, while reducing the cost. Incoming TV is available as a mobile app. Some 600,000 users have already downloaded the beta version and three million videos have been played. Last year, Incoming was selected as one of 23 start-ups for Tech23 2012. Now it has secured $1.1 million in seed financing from a number of investors. The round was led by One Ventures, an Australian venture capital firm that invests in innovative companies in the information technology, life sciences and clean technology sectors. Funding also came from NICTA – Australia’s Information and Communications Technology Research Centre of Excellence – and Citrix Startup Accelerator, based in Silicon Valley. Incoming, based at Australian Technology Park in Sydney, is NICTA’s 11th spinout company. Incoming TV has been developed specifically for mobile phones and tablets. Its predictive support for the service draws from information on the user’s device, including contextual data such as time of day, location, usage patterns and interests, and social and physical behaviour. It then applies NICTA’s machine learning techniques to pre-fetch a suitable selection of video material. NICTA research leader Dr Max Ott joins Incoming as its first chief technology officer. Paul Hoff, NICTA's director of technology transfer, told StartupSmart NICTA has invested a total of $400,000 in Incoming. Citrix Startup Accelerator, meanwhile, invests in start-ups creating the next generation of cloud infrastructure services, mobile enterprise solutions and collaboration technologies. In addition to a $250,000 convertible note investment, start-ups have access to an advisory panel and office space in Silicon Valley. According to McKeague, who is currently overseas, Incoming allows mobile networks to be used more proficiently in off-peak periods. “The mobile industry estimates that over 20% of subscribers watch mobile videos on any given day, accounting for over 50% of global mobile data traffic on wireless networks,” he said in a statement. “This is costly for users, carriers and content providers. The Incoming TV service addresses this by pre-loading content using Wi-Fi networks.” Dr Michelle Deaker, managing director of OneVentures and a NICTA board member, said in a statement Incoming has a “significant opportunity” to capture and support video mobile delivery in global markets. “[This means] effectively unlocking 30 to 40% of untapped mobile network capacity, which is likely to be worth up to $20 billion by 2016,” Deaker said in a statement. Michael Harries, chief technology officer of Citrix Startup Accelerator, said in a statement Incoming’s technology is “compelling and complementary” to Citrix offerings. “Citrix Startup Accelerator invests in only the best entrepreneurs and new businesses creating new solutions for today’s problems in cloud infrastructure and mobile,” he said. “We look forward to working with Incoming as they build a world-class business.” According to NICTA chief executive Hugh Durrant-Whyte, Incoming is an “impressive example of NICTA’s research and entrepreneurial capabilities”.
Key players in the Australian tech start-up scene have lashed out at Prime Minister Julia Gillard’s suggestion the 457 visa program is being abused by the IT industry.
While research shows Australian women are among the most entrepreneurial in the world, they continue to be underrepresented in major sectors such as finance and information technology.
High-profile American entrepreneur Tony Perkins has highlighted US investors’ increasing appetite for Australian companies, ahead of Australia’s first-ever AlwaysOn conference.
What kinds of start-ups are most likely to get funding this year? What are the hot sectors in 2013?
Almost a quarter of Australians are planning a career change this year, while hiring intentions are mixed among employers, according to separate pieces of new research, suggesting many people could be looking to go it alone in 2013.
Start-ups often underestimate the time required to raise capital, says the co-founder of Starfish Ventures, following a $2 million investment in an email and web communication company.
A lack of risk-taking and a preference for service-based industries has been blamed for a shortfall in start-up investment secured by women, after US research revealed female-created ventures receive 8% less funding than men.
Materials science start-up TenasiTech will ramp up development of its polymer technology after securing $1.4 million in grants and equity capital from the Queensland Government and Uniseed.
Tech start-up Paloma Mobile has raised $1.5 million in a Series A funding round led by local venture capital firm OneVentures, despite launching less than a year ago.