The UK Trade and Investment Department (UKTI) will take nine Australian fintech startups on a mission to London in September. The mission is designed to help Australian startups understand the British and European markets, with an eye to encouraging those startups to consider London as a base when they’re ready to enter those two markets. UKTI inward investment adviser Katie Heathcote says the program is leveraging an increased interest in fintech over the past year or so. “I’d been speaking with AWI Ventures and Kim Heras (of 25fifteen) and the guys from Tyro for the last eight months, and I was getting a sense from the meetups in Sydney that fintech was not only an emerging industry in Sydney, but it was really taking off,” Heathcote says. “The opening of Stone and Chalk and Tyro in Sydney was (the) turning point for us doing the mission as we realised the immense potential in this sector for entrepreneurs and startups. “A lot of people were looking to London, taking what they’re doing there, and bringing it back to Sydney. So we’re leveraging off that excitement.” Australian fintech startups can apply to be one of the nine startups that head to London. UKTI is looking for companies that have been operating for at least six months and have a “willingness or commitment” to the UK as part of their long-term business plan. The successful startups will receive return economy airfares (minus taxes) with British Airways, tickets to London Fintech Week and the opportunity to partake in UKTI events. “Understanding other markets is beneficial for any company. It’s about giving startups the opportunity to expand to the UK at a later stage, when they’re ripe and ready,” Heathcote says. “There’s 60 million UK people, and it’s a gateway to the rest of Europe.” The application process should take about 20 minutes. Applications close on Friday, May 22. You can find more details here. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Stone and Chalk, a new fintech hub that promises to help accelerate the development of Australian fintech startups, was unveiled in Sydney on Tuesday. The independent not-for-profit will be located on level 26, 45 Clarence Street in the Sydney business district. It will include 1230 square metres of office space with the potential to grow to 3000 square metres. Stone and Chalk’s co-working space will open in May and can fit up to 150 entrepreneurs, as well as offering space for seminars, industry meetings and conferences. Corporates will also be able to rent space in order to collaborate with the startups working there. New South Wales Premier Mike Baird, who spoke at the hub’s launch yesterday, says it will encourage innovation and creativity in fintech. “Stone and Chalk will provide fintech startups with subsidised office space to collaborate, network and investigate venture capital opportunities,” he says. “The fast-growing fintech sector will further strengthen Sydney’s position as Australia’s business capital and a globally recognised and competitive finance sector.” Stone and Chalk chair Craig Dunn says the hub will become the heart of fintech in Australia and hopefully Asia. “Digital disruption is transforming the financial services industry and there is much to be gained through greater collaboration between stakeholders in the fintech ecosystem. We are focused on brining to life our vision for Sydney’s fintech hub to support startups compete, thrive and lead on a world stage.” Toby Heap, managing director of the AWI Ventures fintech accelerator program, says the new hub will provide a physical focus for the growing fintech ecosystem. “Our aim is to provide an ecosystem of advice and support that empowers the brightest up and coming financial services executives to leave their often comfortable nests and start a new generation of world leading financial services organisations.” The hub was made possible due to professional and financial contributions worth more than $2 million from Allens, Amazon, American Express, AMP, Capital Markets CRC, CIFR, FINSIA, Finzosft, HSBC, IAG, Intel, KPMG, Macquarie Group, Oracle, Suncorp Bank, Veda, Westpac and Woolworths. Co-founder and chief operating officer of Pocketbook, Bosco Tan, praised the commitment shown by the government and private organisations in coming to “collaborate and elevate innovation”. “Being surrounded and supported by the who’s who of the sector is a critical step to shortening the process of ideation and execution,” he says. Posse co-founder Rebekah Campbell says the there’s a huge opportunity for innovation in financial services. “The fintech hub is a great initiative to drive focus and collaboration in the sector. I’m sure we’ll see some giant disrupters emerge as a result in years to come,” she says. Fintech start-ups that would like to express interest in moving to Stone and Chalk, visit stoneandchalk.com.au for more information. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Australia is at risk of becoming one of the last developed markets in the world to act in support of equity crowdfunding, according to the founder of equity crowdfunding platform Equitise, Chris Gilbert. Sources told The Australian that Treasury officials have concerns about crowdfunding schemes and the government will delay the details of new policy until after the department consults with industry and the community. Gilbert says he’s been told by a prominent government source that there’s a chance regulation might not be in place until July 1 next year, and a small chance that it might not happen until July 1, 2016. Equitise, one of four startups in the AWI Ventures accelerator program, is working towards its New Zealand launch in four weeks’ time. Unlike Australia, New Zealand has introduced laws which allow retail investors to participate in equity crowdfunding and enable startups like Equitise to operate. Gilbert says Equitise would not be impacted too much if regulation was delayed until next year. He says while they would have liked to launch in Australia first, the startup is content focusing on that market for the time being. However, a delay until 2016 is a different matter. “It’s looking like legislation and licensing will be released in the first of July next year, and Australia will be one of the last developed markets in the world to support equity crowdfunding,” he says. “We can deal with the 1st of July next year, but if it were the 1st of July the following year that would be pretty bad for us.” Earlier this year the Corporations and Markets Advisory Committee (CAMAC) called for the government to make it easier for startups to raise capital through online crowdfunding platforms. Currently, crowdsourced equity funding is only available to wholesale investors with more than $2.5 million in investable assets or annual earnings of around $250,000. CAMAC recommended Australia introduce legislation which allowed retail investors to invest up to $10,000 a year, across at least four startups, in equity crowdfunding, and allow companies to raise up to $2 million per year on such platforms. The Australian reported that some government ministers regard these caps as too low, and Gilbert agrees. He thinks Australia should follow New Zealand’s lead and allow investors to invest as much as they want. “If they understand the risks they should be able to invest,” Gilbert says. “I think it’s important to have a cap, but $10,000 is way too low. It’s difficult to say exactly what that cap should be. In New Zealand where we’re launching in about four weeks’ time, they don’t have caps. If you look at that market they’re leading the way globally in terms of legislation at the moment. “We’re required to have disclosure statements, warning statements, all through the site, it’s quite up front and you really can’t miss it. That’s how they’re dealing with the risk.” He also believes companies should be able to raise up to $5 million per year through equity crowdfunding. “$2 million is far too low. New Zealand has the same limit, although it is bringing in a micro-cap market on the stock exchange. The Australian Stock Exchange has a minimum market cap of $10 million, so there’s an $8 million difference that needs to be filled.” The chief operating officer of VentureCrowd and Artesian Capital Management, Tim Heasley, says while there is broad political support for the liberalisation of equity crowdfunding in Australia, that’s where agreement ends. He believes it’s inevitable that reform won’t occur until mid-2015 at the earliest. Among CAMAC’s recommendations were that crowdfunding platforms should be prohibited from having a financial interest in a startup or platform, or being paid in shares of startup or according to the amount of funds raised. He says those recommendations are “nonsensical” and give strength to the argument that CAMAC failed to consult properly with industry before releasing its report. “Neither is required to protect against conflicts of interest and each would make it extremely difficult, if not impossible, for platforms to be run profitably,” he says. “There has been some criticism on the low caps placed on individual investors by which they can invest only $10,000 in any year and this must be spread over at least four startups. VentureCrowd favours any recommendation that requires diversification of investment across a number of start-ups instead of allowing investors to put their eggs in one basket. “While the overall limit could be increased, we see no harm in starting somewhat cautiously now with a view to higher limits in the future as this form of funding grows in popularity.” Australian Private Equity and Venture Capital Association chief executive Yasser El-Ansary says irrespective of what the caps are, the more pressing issue for the government should be the development of a new national innovation policy. “Private investment whether through crowdfunding, angel, venture capital or private equity funding needs to be accompanied by a national innovation policy that has a focus on the translation of research into commercial outcomes,” he says. “Our weakness is in the D of R&D, we need a new translational innovation fund to attract matching private capital. We have recommended a new $500 million translational innovation fund funded by 10% of the proposed Medical Research Future Fund. “Also, the government needs to address a range of tax issues including ESOP structures. Without such a holistic approach at the policy level, we’ll continue to major in the minors and innovation will not deliver for the economy.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
A wealth management program and an app that helps newcomers make the right investment choices are among the startups selected by AWI Ventures to take part in its Fintech accelerator program. The company has invested $100,000 in each of the four startups and will allow them to spend six months at the AWI offices in Sydney’s CBD to further develop their products and business plans. AWI Ventures chief executive Ben Heap said in a statement he hoped Sydney would become a major centre for financial services technology. “Australia is a global player in financial services with the second largest banking system and the fourth largest savings pool in the world,” he says. “It makes perfect sense that we should be leading the world in the fin-tech space.” The startup founders were chosen from more than 80 applicants across the country. “We were pleased by the number of applicants for our first intake into the program and were thrilled to have so much interest from every state in Australia and several international locations,” Heap says. The four selected startups are: 1. Debt to 10k 2. Equitise 3. MacroVue 4. Simply Wall St Applications are currently open for the next accelerator program intake and close on September 20.
AWI Ventures’ financial technology fund has poured $250,000 into online investment startup Stockspot, in its first investment since launching last month. AWI Ventures is a subsidiary of ASX-listed Australasian Wealth Investments. They announced an accelerator program for financial tech startups, which will invest $100,000 in seed capital per company, last month. Stockspot will enable and advise people on creating a developed portfolio development available online. It will be Australia’s first entirely online investment offering. The offering is still in a private beta mode, but is set to launch to the public by the end of 2014. Stockspot founder and chief executive Chris Brycki told StartupSmart the fact it’s cleared many of the barriers to entry in the notoriously difficult to access financial services industry helped its investment case. “It’s a really hard industry for startups, with high barriers to entry such as legal hurdles and finding the right partners. We’ve done the ground work and are almost ready to go, which I suspect helped a lot,” Brycki says. Brycki, who quit his job as a hedge fund manager last year to develop his startup, says the $2 trillion Australian financial services industry is ripe for disruption. “The industry here is so large and hasn’t really been disrupted by technology to the extent it will and should be. Media, travel and retail are going online and changing how they’re structured, but financial services still streams through the say traditional paths.” According to Brycki, these traditional paths involved a range of players, each charging fees (a practice known as “clipping the ticket”), meaning direct tech solutions can be considerably cheaper and easier to manage. AWI Ventures chief executive Ben Heap says in a statement it expects Stockspot’s product to be well received, particularly by self-managed super fund trustees. Stockspot is currently a team of two, Brycki and a developer. The funds will go towards hiring and outsourcing engineering, marketing and social media management.
An accelerator with $1 million to invest in 10 financial tech start-ups has been launched in Sydney this week by Communications Minister Malcolm Turnbull. The AWI Ventures Accelerator Program is seeking 10 start-ups with teams of two or three in which to invest $100,000. The first intake will be selected in April and begin a 12 month program which includes office space and expert mentoring. AWI Limited chief executive Ben Heap told StartupSmart the financial services sector was ripe for disruption. “Our very strong conviction is there is a whole array of interesting ideas that should get going, but struggle to. This problem is especially acute in the financial services as it’s a heavily regulated market with complex business structures coordinated by an oligarchy of big banks so it’s problematic for new guys.” Heap says AWI Limited believes it is small enough to not be too constrained, but has sufficient size to gain access to expert and information networks start-ups need. Start-ups can apply armed only with an idea, but must be able to demonstrate their capacity to deliver the first iteration of their product to test the market within four months. “We’re up for seeing any kind of idea, but especially from people who are looking at the issues from a customer point of view, and can pitch a lay-down misere solution that customers will love,” Heap says. The teams are expected to raise a second round of capital in the first six months. AWI intends to support them to their series A round. “We have four of the ten largest banks in the world and an incredibly strong and globally powerful financial sector,” Heap says. “We’d like to think our initiative, together with what other people are doing, will provide a catalyst to allow a Silicon Valley-like hub to develop in this market,” Heap says. AWI Ventures is a subsidiary of ASX-listed investment company Australasian Wealth Investments Limited.