Brisbane e-commerce startup Temando has raised $50 million in Series B funding in order to accelerate its expansion into US and UK markets. The latest funding round was led by global mail solutions provider Neopost, bringing the total capital raised by the company to date to $56 million. Temando allows people to book and track shipments online and has more than 50,000 registered users worldwide. In 2012 James Packer’s investment fund Ellerston Capital invested $5 million in the business for an undisclosed amount. Co-founder and chief executive of Temando, Carl Hartmann, told StartupSmart he hopes the raise will mean the software company becomes the “employer of choice” in Queensland. “We intend to keep it that way as there’s lots of good talent and we like to keep it as much in the ecosystem here as we can,” he says. “But as we do more projects in America and Europe we need more boots on the ground as they are essential to getting more projects – otherwise you tend to spend a lot of time on a plane.” Hartmann says e-commerce is a space to watch now that consumers are demanding frictionless payment solutions and technology is allowing retailers to improve the shipping experience. “Omni-channels are starting to explode in the US and particularly in Australia, I think, as more retailers are thinking pan-Australia given the New Zealand dollar is strong and e-commerce in Asia is growing,” he says. “Europe is going through a similar flux to the US where you’re getting more retailers expanding through Europe.” Hartmann says he is thrilled to have the backing of a major industry player and hopes the raise will put both the company – and by extension Australia – on the map. “It’s a great thing as an Australian company to achieve this,” he says. “I’m always proud when I have success and I’m quite humbled to be honest. It’s a test to the kind of business Australia produces. Australia produces some of the best tech businesses in the world… unfortunately not all of them get discovered but I’m certainly doing my best to fly the flag.” Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.
The Financial System Inquiry has taken a “slow and steady” approach to financial crowdfunding, despite perceptions that Australia is lagging behind in this area. While acknowledging the wide range of global crowdfunding models, the report focuses on securities-based crowdfunding such as crowd-sourced equity funding (CSEF) or debt, and peer-to-peer lending (P2P), recommending: Graduate fundraising regulation to facilitate crowdfunding for both debt and equity and, over time, other forms of financing. The aim is to eventually have a holistic regulatory setting that can facilitate internet-based financing, including crowdfunding. For the moment, it will be an “adjust-as-you-go” approach with the regulations, but the focus will be on disclosure requirements of issuers and protection of retail investors. Since CSEF has far more regulatory requirements than P2P, the inquiry recommended a consultation on CSEF regulations, leading Treasury to immediately release a discussion paper on CSEF. The government’s measured approach is justified if we realise we are looking at the tip of a very huge iceberg. Crowdfunding is a whole new market with its own ecosystem. Just like we have emerging markets, frontier markets and so on, this financial crowdfunding market is expected to disrupt financial intermediation similar to what Amazon did to bricks-and-mortar bookshops. Tagging on keywords like collaborative finance, fintech, platforms, algorithms, networks, engagement, equity slices, social validation and momentum-investing, this market is projected to reach US$93 billion by 2025 and an astonishing US$300 billion once the developing countries release their crowd. With the new market comes new asset classes such as venture capital for retail investors. Take the case of Australian entrepreneurs Dan Joyce and Jared Mooring, now living in London, who pitched their venture My Mate Your Date (MMYD) on the UK equity crowdfunding platform Crowdcube with a target of reaching £130,000 representing 20% equity by 21 December 2014. The project was pitched on the platform around 29 October 2014 (according to its Facebook entry). By 9 December MMYD had raised £110,550 (representing 85% of funds) from 97 investors, with the largest investment being £20,000. The pitch’s links to MMYD’s Facebook and Twitter, the stream of messages, “likes”, and “shares” and “comments” matter as much as the financials and key data. The social validation of a venture can make a casual observer become a curious investor, and then a self-appointed brand ambassador, passionately following the firm as it grows and into a possible IPO. This is the power of a networked, engaged crowd. The returns in these ventures are clearly much more than financial which explains the rush by even banks and large companies to back these ventures. SocietyOne Australia is backed by Rupert Murdoch and James Packer as well as Westpac’s Reinventure Group. Financial crowdfunding is a brilliant solution for the small and medium-sized enterprises’ funding gap issue, as well as for the economy’s innovation and industry competitiveness agenda, while delivering along the way the gift of efficient risk-return transactions to the crowd. That’s a lot of wins and doesn’t justify the slow approach. But, here’s why one needs a steady approach too - new market, new risks. Recently, Aurora Labs, a Perth-based startup that launched on Kickstarter on 23 September 2014 cancelled the campaign on 9 October despite receiving $304,755 from 122 backers - three times its $100,000 target - due to the company’s concerns over protecting its intellectual property (IP). Aurora had failed to understand Kickstarter’s disclosure requirements: When a project involves manufacturing and distributing something complex, like a gadget, we require projects to show a prototype of what they’re making, and we prohibit photorealistic renderings. The funders want as much detail as possible, while the issuer wants to protect IP. Questions around what “showing a prototype” really means and the level of detail required in its disclosure, need to be addressed. Other risks such as cross-jurisdictional/cross-border complexities, securitisation of unsecured loans, and a lack of disclosures of “real” returns have been highlighted in recent reports from Infodev/World Bank and the International Organization of Securities Commission. We also need to understand the “real” business model of these Fintech companies. LendingClub debuted this week on the New York Stock Exchange under the ticker symbol LC with a highpoint value of US$5.7 billion, but rose to more than US$9 billion on the first day of trading. Is it a “fin” or a “tech”? It is being valued as a technology company. We are back to the question: “What’s this fintech’s business model”? Well, that explains the “understand before you regulate” perspective of the inquiry. After all, we don’t need a regulation that turns out to be a lemon. This article originally appeared at The Conversation.
A taxi booking app backed by the likes of Paul Bassat and James Packer has raised around $5 million over the weekend in a bid to further disrupt Australia’s $5.4 billion taxi industry. The goCatch app allows users to book nearby taxis and track their progress via GPS. Co-founder and chief executive Ned Moorfield told SmartCompany the latest equity round, which brought on a range of new shareholders, will help the business “get on with scaling up in a much bigger way”. “The funds will be very much constructed on the growth of the business, building up our marketing capabilities,” he says. “At the moment, we need to get our brand awareness up more and introduce the public to the service. You can see the potential for a pretty large company emerging out of this.” The Financial Review reports some of Australia’s most successful entrepreneurs and Rich-List families backed goCatch’s equity raise on Friday. However, Moorfield says several of the names mentioned in the article – including Bassat and Packer– have previously invested in the company and are not new shareholders. “The article mentioned the Kahlbetzers, David Paradice, and Square Peg, all of whom are existing shareholders and who did not participate in the current funding round,” he says. goCatch is currently valued at $19 million. When asked why some of Australia’s bigger players are willing to invest in an app like this, Moorfield says it is because they can see the value in new technology and notice when a market is ready for the taking. “People can see the opportunity in the market with this sort of business model,” he says. “It is an industry ripe for disruption.” The taxi industry is indeed a big market, with around 30,000 registered drivers in Australia, fuelling a total of about 216 million paid fares a year. “Three to four per cent of the national market share is a pretty substantial share of the market,” Moorfield says. “Having the largest base of engaged drivers nationally, we’ve got the real potential to build a big national business.” Looking ahead, goCatch shows no sign of slowing down. Moorfield says the focus will be on scaling up the user-base and improving the customer experience. “We want to continue to include the user experience and make sure people are having a great experience when they’re using our service,” he says. This story originally appeared on SmartCompany.
Seven Group Holdings chairman Kerry Stokes is rumoured to have joined a consortium of high-profile business and media figures planning an investment in peer-to-peer lender SocietyOne. According to a report in The Australian Financial Review, the consortium is led by former Challenger chief executive Dominic Stevens, and includes both News Corp co-chairman Lachlan Murdoch as well as Crown chairman James Packer. The report also states the lender has attracted the attention of a rival consortium, which includes US private equity giant The Blackstone Group and New York-based investment bank Credit Suisse. The foreign rival bid is reportedly interested in expanding the company overseas. A spokesperson for SocietyOne told StartupSmart it is not in a position to comment on speculation. Popular overseas, the peer-to-peer (P2P) lending model works by allowing investors to lend a fraction of a loan directly to a borrower, without using a traditional bank or financial institution as an intermediary. In turn, companies such as SocietyOne provide a platform that links credit-worthy borrowers with investors. SocietyOne, which claims to be the only active lender of its type in Australia, cites a number of benefits of the P2P model. This includes lower fees and more flexibility for borrowers, along with a new class of asset for investors. Last month, the P2P lender dropped its personal loan rate for a prime borrower to 9.80% pa, 5% lower than the average rate from the major banks. It currently offers personal loans of between $5000 and $30,000. The consortium’s interest comes after Westpac’s Reinventure Group made a $5 million investment in SocietyOne during April. The investment was believed to be the first equity stake a bank has taken in P2P lender anywhere in the world. A further $3.5 million was poured into SocietyOne by Rocket Internet and several local investors at the same time as the Reinventure. StartupSmart attempted to reach a representative of Stokes through Seven West Media, but received no response prior to publication.
Miners and property developers are among Australia’s wealthiest people, but young technology entrepreneurs are snapping at their heels, according to the 31st BRW Rich 200 released Friday. Gina Rinehart once again topped the BRW Rich List with an estimated worth of $20.01 billion, down from $22.02 billion the previous year. Anthony Pratt, chairman and chief executive of paper and packaging company Visy Industries, came in at number two and is Australia’s richest man, with a net worth of $7.64 billion. James Packer came in at third place with $7.19 billion. Despite the usual pack of miners, property investors and those born into wealthy families dominating the list, people who have made their fortunes from striking it out alone in the IT industry are quick on their heels. Former Smart50 winners and Atlassian founders Mike Cannon-Brookes and Scott Farquhar have surged ahead in this year’s rankings, coming in at number 35 and 36 respectively. Between them, the pair is worth $2.14 billion. Last year the entrepreneurs were worth $250 million each. Atlassian, a software development company founded in 2002, has averaged 40% on year growth for the last five years. Cannon-Brooks and Farquhar have been hailed as examples of how Australian tech companies can thrive on the international stage. However, the pair also has their priorities set on other things besides profit. In April, they pledged $35 million to community-building after setting aside 1% of the company’s equity to charity when starting the business. Farquhar told SmartCompany Atlassian has a passion for investing in charity for the long-term, especially when it comes to giving people the skills to help others. “It’s really about education,” he said. “Ideally in 50 years’ time we want to say we have really achieved fixing something rather than just patching over something.” Another entrepreneur, Ruslan Kogan, also fared well and came in at number 162 – his first time making it onto the list with a net worth of $320 million. Kogan’s business is going from strength to strength, and launched in New Zealand in March. “Our goal is to deliver the latest technology at market leading prices,” he toldSmartCompany. “Whether it is manufacturing our own Kogan products, or sourcing the world’s biggest brands, we can cut out all the middlemen to guarantee the best prices.” Mining magnate turned politician Clive Palmer didn’t fare too well in comparison to previous years, falling a massive $980 million in comparison to last year. However, fellow miner Andrew Forrest had the opposite fate – his wealth jumping from $3.66 billion to $5.86 billion this year. The average age of those on the BRW Rich 200 is 64, and of the 200 people on the list 39 of them are billionaires. Only 7% of the rich-listers are women. The richest people in Australia: 1. Gina Rinehart - $20.01 billion 2. Anthony Pratt & family - $7.64 billion 3. James Packer - $7.19 billion 4. Frank Lowy - $7.16 billion 5. Ivan Glasenberg - $6.63 billion 6. Hui Wing Mau - $6.35 billion 7. Andrew Forrest - $5.86 billion 8. Harry Triguboff - $5.5 billion 9. John Gandel - $4.08 billion 10. Kerr Neilson - $3.35 billion This article originally appeared on SmartCompany.
According to SEEK co-founder and Square Peg chief executive Paul Bassat, payments are the “holy grail of innovation”. He made the comment at The Australian Financial Review and Macquarie Future Forum on Tuesday, where some of Australia’s leading entrepreneurs declared the industry ripe for disruption. Despite banks in Australia being protected by complicated regulations, entrepreneurs are placing the industry under increasing pressure. Adding to banking woes are the likes of Google, Amazon, Apple and Facebook eyeing entry to the payments market. Here are the top four Australian disruptive financial services startups to watch: 1. Society One Society One is Australia's leading peer-to-peer lending platform, with a $5 million investment from Westpac’s Reinventure Group, a $50 million fund set up to back early stage startups. It’s rumored to be on the investment radar of both James Packer and Lachlan Murdoch. Borrowers list loan requirements and investors decide which loans they choose, how much to invest in each loan, and the rate at which you want to earn their interest. Its personal loan rate for a prime borrower is 9.80% pa, 5% lower than the average rate from the major banks. 2. Tyro Payments Tyro provides credit, debit and EFTPOS card acquiring services and does not take money on deposit. It was founded in 2003 by ex-Cisco employees Peter Haig, Andrew Rothwell and Paul Wood as MoneySwitch Ltd. Eleven-year-old Tyro is in its second year of profitable business operations. Disrupting the Australian banking industry was never going to be easy, and it took the team over $30 million in capital and a founder break-up to get there. At launch it was the first new entrant into the eftpos space in 15 years. 3. Pin Payments Pin Payments is an Australian-based startup operating from Melbourne and Perth that offers onsite payments and a developer API without the need for a merchant account. It received a grant from Commercialisation Australia and partnered with some of the Australian banks to make its offering possible. Both overseas-based Braintree and Stripe operate in the same space, but Pin has a solid local focus. Getting access to a payment system has previously been a juggle for companies, especially early stage ones. Pin Payments is aimed at developers who can easily integrate its service through their API. 4. CoinJar CoinJar, a Melbourne-based bitcoin exchange and payment system, which 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 has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction. CoinJar was the first company to get its Bitcoin app re-listed in the iPhone App Store, after Apple revised its app guidelines to include virtual currency apps that it previously excluded.
James Packer’s Crown Resorts is set to make a bid for a $US2 billion casino on the Las Vegas Strip. The investment marks a return to Vegas for the gaming tycoon, who was burnt by two Las Vegas Casino investments made on the eve of the global financial crisis. Packer is believed to be interested in investing in The Cosmopolitan, which was taken over by Deutsche Bank in 2008 after gaming tycoon Ian Bruce Eichner defaulted on a loan, and is located next to MGM Resorts International's Bellagio. Nokia deal with Microsoft to close this week Smartphone maker Nokia has told investors it expects the $US7.2 billion sale of its devices and services business to Microsoft to be finalised this week. The company says it has now cleared all major regulatory hurdles required for the deal to go ahead. The deal will see Nokia sell its mobile phone division to Microsoft, including its Lumia smartphone line, with the Finnish company retaining its network equipment manufacturing business. US fibre optic rollout continues One of the largest telecommunications carriers in the US has announced plans to deploy fibre to the node (FTTN) or fibre to the premises (FTTP) services across 21 US cities, including Chicago, Los Angeles, Miami and Atlanta. The AT&T U-verse deployment comes as Google continues its fibre optic network rollout in selected US cities. The company claims it already has 10.7 million internet and pay television subscribers using its fibre optic services. Overnight The Dow Jones Industrial Average closed up to 16449.2. The Aussie dollar is at US93.27 cents.
Gaming mogul James Packer is one step closer to realising his goal of building a second casino in Sydney, with the NSW government announcing cabinet approval for his $1.5 billion resort proposal. Under the agreement, Crown’s VIP-only casino at Barangaroo will be restricted to VIP gaming only, with no poker machines or low-limit bets on table games. “This is about high-worth individuals engaging in gaming,” says NSW premier Barry O’Farrell. “It's estimated – and on the basis of Crown's Victorian experience – that 5% of local gamers would use this facility, but these are people who would gamble between $300,000 and 400,000 a year – clearly beyond the means of most people.” Warrnambool confident of a deal to protect Coon and Cracker Barrel Warrnambool Cheese and Butter chief executive David Lord says he’s confident Lion will be able to strike a deal with Canadian food giant Saputo that will protect the viability of its entry-level brands. Lion, a subsidiary of Japanese brewing giant Kirin, purchased 10% of WCB, which supplies its Coon and Cracker Barrel cheese brands, amid a three-way takeover battle for WCB involving Bega, Saputo and Murray Goulburn. “From what Lion said their motivation to buy their stake was to get a seat at the table. Well they've done that,” Lord says. “Now, I think it's up to the parties to sit down and talk about how they move forward, in particular Lion and Saputo.” Elders warns of yet another large loss Rural services giant Elders is warning investors it expects to report a $510 million loss for the year to September, adding to the $303 million first-half loss it reported earlier this year. The result would bring the company’s total losses in the five years since the start of the global financial crisis to $1.6 billion. The string of bad results has seen the company’s market capitalisation collapse from $2.05 billion in 2007 to just $52 million yesterday. Overnight The Dow Jones Industrial Average is up 0.08% to 15773.61. The Aussie dollar is down to US93.64 cents.
It takes many things to get a business off the ground. It takes a flash of insight, plenty of drive, and good advice. It takes savvy staff and helpful networks. It also takes something few start-up founders have to begin with: money. Australia’s venture capital industry is growing and maturing. But the funds to finance start-ups don’t just come from high finance. Increasingly, a generation of Australian entrepreneurs who made or grew their fortunes over the past decade are investing their money back into start-ups, either directly or through niche venture-capital firms. Through this, they’re helping build a start-up ecosystem able to support new, growing start-ups, using the spoils of yesterday’s success stories. Here are just a few rich listers putting some of their money back where it came from. James Packer In many ways the trailblazer in this regard was James Packer, who made a fortune investing in companies like SEEK and Carsales.com.au a decade ago. While by no means a successful start-up leader (Packer inherited most of his money), he has nonetheless grown his fortune through savvy start-up investing, a passion that doesn’t appear to have ebbed with time. Packer bought a 25% stake in SEEK for $33 million in 2003. When the business listed, Packer’s stake was worth $150 million. By the time he sold out, he had made $440 million from his investment. He was also an early investor in Carsales.com.au, putting $100 million for a stake in the company that sold for $500 million a few years later. Those were some of the best dot.com investments ever made in Australia, and, perhaps spurred by his early success, Packer has continued to invest in start-ups with potential to disrupt their industries. One of his most recent investments was last month in taxi app goCatch, which could radically disrupt Australia’s cab companies and Australia’s Cabcharge monopoly by allowing passengers to book a taxi by directly liaising with the driver. Paul Bassat Packer is joined in his goCatch investment by Paul Bassat, a cofounder of SEEK who’s since left running the business to his brother while he focuses on investing. Bassat is the cofounder and joint chairman of Square Peg Capital, a newly minted venture capital firm that’s already put money into a heap of start-ups like beauty-box business Bella Box and design start-up Canva. “First and foremost, we want to back fantastic people who are smart, passionate and high integrity,” Bassat told StartupSmart when Square Peg was formed a few months ago. “For businesses that have been around for a few years and have a bit more traction, the question of if they’re solving a problem has been partially answered. If it’s an early stage business without a track record, we want to know exactly what the problem you’re trying to solve is if you’re actually solving it, in a unique and differentiated way.” Bassat is also a mentor at Startmate, which offers mentoring and seed financing to online and software start-ups. Mike Cannon-Brookes and Scott Farquhar Bassat isn’t the only rich lister to volunteer his time mentoring young companies. Scott Farquhar and Mike Cannon-Brookes, who cofounded Atlassian and for two years have topped the BRW Young Rich list, are also mentors at Startmate. Last year, Cannon-Brookes also invested in Shoes of Prey, which gives shoe lovers the chance to customise every part of their shoes online and have a unique pair created and shipped. Both Atlassian cofounders put money earlier this year into Ninja Blocks, a Sydney start-up that builds devices that let people link their devices to physical things in their homes (‘SMS me when the washing is done’, for example). This story first appeared on SmartCompany.
It often surprises casual observers that the annual BRW Young Rich edition counts the 100 youngest self-made entrepreneurs under 40. After all, in most industries, awards for ‘rising stars’ and the like cut out at 25 or 30. The reason BRW has to give people 40 years to shine is simple: hardly any businesspeople make a killing by 30. A list cutting off there would be dominated by sports stars and celebrities. And for a business publication, that wouldn’t interest its readers as much. Almost all of the Young Rich 2013, unveiled in the magazine’s flagship edition out this morning, are aged from 30 to 40. The youngest person on the list, MotoGP rider Casey Stoner, is aged 27. SmartCompany spent a fascinating morning dissecting the latest list. Here’s what Australia’s youngest millionaires have in common. Life’s work Most of the Young Rich are entrepreneurs, who started companies and over years helped grow them. Apart from the sports stars and celebrities, there are few employees on the Young Rich. Thanks to Nathan Tinkler dropping off the list this year, there are now two more. Todd Hannigan and Tom Todd made their $84 million joint fortune by leading Nathan Tinkler’s Aston Resources before it listed. In 2011 they lost their jobs, but were given six months’ pay and a whole lot of stock in the process. They sold their stock before things got rocky for the sector. This must be especially galling for Tinkler. BRW doesn’t think his assets exceed his debts. He didn’t make the $18 million cut-off, leaving him entirely off this year’s list. Around this time in 2011, Tinkler was valued at $1.13 billion. Most of the Young Rich have had a good year. Exactly half increased their wealth this year, while only 16 lost wealth. The rest were more or less steady. Tech tricks The full Rich 200 list, for which there is no age limit, is dominated by property developers. But the Young Rich has few of those. Over one in three (34) of the Young Rich made their money in technology, of which 22 were web entrepreneurs. In the top 10, eight started technology companies. These include Atlassian founders Mike Cannon-Brookes and Scott Farquhar, steady at number one with a joint fortune of $550 million. They were pegged at $480 million a year ago. The fastest-rising names in the top 10 are Ruslan Kogan, of Kogan.com, who more than doubled his fortune to $315 million, and Freelancer.com chief Matt Barrie, who’s risen into the top 10 with $185 million (he was pegged at $50 million last year). Both companies are looking at listing on the ASX in the near future, which could see their founders get a lot richer if all goes well. Reinvesting the profits If so, they’d be some of the few Young Rich-listers to turn their business success into serious disposable income. For most of the Young Rich, their wealth is ‘paper money’. They own large stakes in highly successful businesses. If those businesses list or are sold, they can cash in some of that ownership. Until then though, many of the Young Rich are fanatical enough to keep most of their wealth tied up in the one thing. For example, at Kogan.com, the online electronics retailer, shareholders Kogan and David Shafer reinvest the profits every year. Shafer told BRW their remuneration was on an “as needs” basis. “Building something is much more exciting,” he said. Perhaps this need to reinvest profits is driven by Australia’s low venture capital spend. According to a recent PwC report, there is less venture capital available in Australia, relative to our population, than in Israel, the US, Norway, Switzerland, Demark, Britain, or France. When capital to expand isn’t readily available, revenue can be the best source of funds. Slim pickings for women As always with Australian rich lists, there are few women wealthy enough to make the cut-off. Only seven women make the Young Rich, of which the wealthiest is Carolyn Creswell ($55 million), of Carman’s Fine Foods. The next wealthiest is Erica Baxter ($40 million), who is in the process of finalising her divorce from rich list-fixture James Packer, which could see her secure another $100 million according to recent reports. Other women on the list are Lilly Haikin ($40 million held jointly), who bought chocolate café chain Max Brenner to Australia, PageUp People founder Karen Cariss ($25 million held jointly), golfer Karrie Webb ($22 million), MyBudget founder Tammy May ($20 million), and model Miranda Kerr ($18 million). This story first appeared on SmartCompany.
Coles’ parent company, Wesfarmers, has reported a full year profit of $2.26 billion for the year to June, with chief executive Richard Goyder defending fuel dockets in the face of an ACCC investigation. Coles reported a 13.1% increase in earnings before interest and tax to $1.53 billion, with revenues up 4.8% to $35.78 billion. Goyder also defends the use of shopper docket discounts on fuel in the face of criticism the practice harms smaller retailers. “We try to give our customers what they want, and clearly they have a strong desire for these dockets at a time when they are under significant cost pressures in their daily lives,” Goyder says. Packer hopes Japan will be the next jewel in the Crown Crown executive chairman James Packer has expressed interest in bidding for a gaming licence in Japan if Japanese Prime Minister Shinzo Abe's Liberal Democratic Party goes ahead with granting licences for a Singapore-style casino resort. “If Japan comes on it will be the second-biggest gaming market in the world. It has 100 million people who are all mad gamblers but they are all doing it through horse racing and pachinko. Japan is looking at the Singapore story," Packer says. "Japan is two to three years before it all gets serious, which is perfect for us because we will have Macau Studio City open and the Philippines open. "Crown Perth will be finished and Crown Sydney should be well underway, approvals pending. It is just going through the political process at the moment in Japan." Dell reports 72% drop in quarterly earnings as PC sales crash Dell has reported net income for the second quarter of $US204 million, down a massive 72% from $US732 million year-on-year. “It was predictably bad. It's not a big surprise that margins compressed to the degree that they did, when they're prioritizing sales volume over profitability," Morningstar analyst Carr Lanphier told Reuters. The news comes as founder Michael Dell battles prominent investor Carl Icahn over the company’s future, with Dell hoping to take the company he founded private. Overnight The Dow Jones Industrial Average is down 1.47% to 15112.2. The Aussie dollar is up to US91.41 cents.
Seven local start-up veterans behind two venture funds have combined forces and launched a merged fund to invest in Australian start-ups which will look to invest “several hundred million over the next few years”. Seek co-founder Paul Bassat, investors Barry Brott, Tony Holt, Dan Krasnostein and Justin Liberman, as well as entrepreneurs Gavin Appel and David Liberman, have created Square Peg Capital by merging Victoria Capital and Square Peg Ventures, both of which launched last year. Bassat told StartupSmart they had combined the similar funds to meet a gap in available Australian funds. “Plenty of people in Australia are providing seed capital, but we think there is a gap in series A, B and subsequent rounds,” Bassat says. “Square Peg was operating on the early stage end of the spectrum with venture capital and Victoria Capital was more focused on the growth stages.” Bassat adds they haven’t structured the company as a fund, as they’ll be investing their own capital and working with a pool of investors, including billionaire James Packer, Seek co-founder Matt Rockman, and Justin Liberman, on a deal-by-deal basis. “The beauty of not having a fund is we only make investments when the right opportunities emerge,” Bassat says. “It’s nice to not have the pressure to feel compelled to invest in things because the money is sitting there. We’re investing our own capital and our partners, so we’ll be careful.” The two funds prior to the merger had invested $20 million in 12 companies including Canva, NinjaBlocks, Bella Box and Vend. “We’ve got the capacity to invest several hundred million dollars over the next few years,” Bassat says. “We have a really good pipeline at the moment. Our investments so far give some indication of the opportunity; although it’s possible we’ll make slightly fewer investments but they’re likely to be a bit larger.” Square Peg Capital is keen to invest in businesses across a range of sectors and growth stages. “First and foremost, we want to back fantastic people who are smart, passionate and high integrity,” Bassat says. “For businesses that have been around for a few years and have a bit more traction, the question of if they’re solving a problem has been partially answered. If it’s an early stage business without a track record, we want to know exactly what the problem you’re trying to solve is if you’re actually solving it, in a unique and differentiated way.”
US hedge funds Centerbridge Partners and Oaktree Capital have accused Billabong of ignoring their rival debt-for-equity bid for the troubled surfwear giant, which they claim would have seen existing shareholders emerge with less debt and more equity. "Centerbridge and Oaktree are very credible, interested parties, and to not even have a discussion with them when they've flown in from the US was astonishing,” a source for the consortium told The Australian. Billabong chairman Ian Pollard rejects the accusation. “We gave [Centerbridge and Oaktree] ample opportunity to provide some indication, at the very least, of what their terms might be, but they indicated they couldn't put up a proposal until they had done due diligence. So we executed the only executable transaction we had,” Pollard says. Telstra threatens to sue Vodafone over 4G speed claims Telstra is threatening to sue Vodafone over claims its 4G network is the fastest in Australia and that its coverage now reaches 96% of the Australian population, claims the incumbent telecommunications giant alleges are untrue. "Telstra is confident of the claims that we make about our network. This type of action is not uncommon," a Telstra spokesperson says. "Vodafone customers in 4G areas with compatible devices will have access to speeds that are among the fastest not only in the country but in many parts of the world," Vodafone chief executive Bill Morrow said last month. Queensland government considering second Brisbane casino Queensland Deputy Premier Jeff Seeney has stated the question of a second Brisbane casino is an essential one for the state government, but it has not finalised a decision on whether or not Brisbane should be a one or two casino town. The news comes as both James Packer-led gaming giant Crown and Sydney casino operator Echo intensify their campaigns over a second Brisbane casino. “The casino operators have no need to be taking shots at each other in the public, in the media as we have seen,” Seeney says. Overnight The Dow Jones Industrial Average is up 0.12% to 15470.52. The Aussie dollar is up to US92.42 cents.
The Australian dollar could drop below the psychologically significant barrier of US90 cents as early as this week, according to several leading economists, with some tipping the currency could fall as low as US83 cents by the end of the calendar year and US75 cents by the middle of next year. “Economic news out of the US is certainly good but significant fiscal problems are still yet to emerge there, which will be a drag on growth. The Australian dollar is doing the RBA's work for it, and if the currency keeps falling the RBA may well not cut rates further,” HSBC chief economist Paul Bloxham said. However, not all analysts share the view, with Deutsche Bank foreign exchange strategist John Horner suggesting the Australian dollar might have fallen by too much already. “We're not bearish about China, and think markets have overdone the response to a batch of bad news in recent weeks. Even if the Federal Reserve does begin to unwind its bond-buying program it has said interest rates will remain low for a very long time, and the Bank of Japan, of course, will continue to pour liquidity in the market,” Horner said. The Bendigo is bullish about margin loans The Bendigo and Adelaide Bank and Westpac-owned BT Financial have revealed they are bullish about the $12.5 billion margin lending sector, which lends money to managed funds and share investors. For Bendigo Bank, the bullishness comes despite their margin loan book shrinking by over 20% to $2 billion during calendar year 2012. “[We] may well have seen the bottom of the market for the margin lending sector. It is early days yet, it does seem that the time is right to invest further in the margin lending business to ensure we are not latecomers to the opportunity,” Bendigo Bank chief executive Mike Hirst said. “We've seen material improvement in overall activity, including significant appetite for fixed-rate margin loans. However, it's too early to make the call whether we are witnessing a permanent return to higher levels of confidence,” a BT spokesperson said. Packer likens Barangaroo casino to sporting rights deal Crown executive chairman James Packer has likened the company’s proposed $1.5 billion casino-hotel development at Barangaroo Point to winning a television sporting rights deal. “This is like a media company buying sporting rights where you are happy to end up in a break-even position for the halo effect it has over the rest of the network," Packer told The Australian. "We modelled and bid Crown Sydney to approximately a 9% IRR (internal rate of return), which is basically a break-even position.” Overnight The Dow Jones Industrial Average is up 0.59% to 15224.69. The Aussie dollar is up to US91.4 cents.
James Packer’s proposal to build a six-star hotel and high roller casino at Sydney’s Barangaroo has been waved through to the next stage of the NSW government’s approval process, beating out rival Echo Entertainment’s plans to redevelop its own casino, The Star. Echo is expected to push ahead with some of its redevelopment plans and push its VIP business harder, despite losing its bid to block Packer’s plans. “The committee think it is likely that Echo would be motivated to undertake at least some of its published strategic investment plans in response to the introduction of competition, whether its proposal was successful or not,” the committee assessing the proposals said in a report. Gas policies needed State and federal governments need to consider policies to ensure Australia’s domestic gas market is not hurt as large export liquid natural gas projects begin to soak up the resource, The Australian reports. The Australian Pipeline Industry Association argues in a position paper that governments need to consider forward-thinking policies to ensure Australia makes the most of its gas reserves. It warns that policies are needed to avoid the potential for “market failure” with unsustainably high gas prices in domestic markets that would hurt the manufacturing, agriculture and construction sectors. European Central Bank to keep interest rates down The European Central Bank has broken with precedent and declared it would keep interest rates at record lows for an extended period and could cut further because of market volatility since the US Federal Reserve said planned to slow its stimulus measures. “The Governing Council expects the key ECB rates to remain at present or lower levels for an extended period of time," ECB president Mario Draghi told a news conference after the ECB left interest rates at 0.5%, calling it a "very significant step". Draghi did not say exactly how long ECB rates would stay at record lows. "It's not six months, it's not 12 months. It's an extended period of time." Overnight The Dow Jones Industrial Average closed up 0.38% at 14,988.55 points. The Australian dollar is down 0.04% at US91.44 cents.
Prime Minister Julia Gillard is set to use a speech at the Per Capita Institute think tank in Canberra to reveal a $12 billion forecast deficit in the federal budget this financial year, due to lower taxes from companies. However, despite the massive shortfall, the Prime Minister is expected to rule out cuts to major new spending initiatives, including the Gonski school funding reforms or DisabilityCare. “Put simply, spending is controlled, but the amount of tax money coming to the government is growing much slower than expected. As we make those decisions, let me be crystal clear about what we will and won't do,” Gillard is set to say in the speech. “Our nation cannot afford to leave children behind or to leave our nation's future economy limping behind the pack, unable to attract the high-wage, high-skill jobs of the future … DisabilityCare must not be jeopardised.” Rupert Murdoch to cash in on News Corp split Rupert Murdoch’s remuneration is set to jump by nearly $4 million as a result of a split that will see News Corp divided into two separate companies in June. Under the proposal, Murdoch is set to become chairman and chief executive of the 21st Century Fox corporation, which will control his media empire’s broadcasting and entertainment assets, as well as the executive chairman of the “new News Corp” which will control the company’s publishing assets. While Murdoch’s base salary will remain at $US20.6 million for his role with both entities, his long-term incentives are set to increase from $US4 million to $US7.7 million. James Packer gains approval for Sri Lankan casino The Sri Lankan government has reportedly granted approval to gaming tycoon James Packer for a new casino in Colombo, according to a report in Sri Lanka's Business Times. Under the proposal, the $250 million Crown Colombo complex will include a 36-story casino and resort complex, to be built in the D.R. Wijewardena Mawatha district of Colombo. A Crown spokesperson said the gaming giant is yet to make a final decision on whether to go ahead with the project, and is evaluating a number of other offshore expansion opportunities. Overnight The Dow Jones Industrial Average is up 0.1% to 14712.6. The Aussie dollar is down to US102.82 cents.
James Packer has reportedly joined a group of wealthy investors in making a $60 million injection into a streaming music business owned by rap icon Dr Dre, the entrepreneur behind the successful Beats Electronics brand.
Forbes Asia’s annual list of the richest Australians is littered with mining magnates, including Gina Rinehart in the top spot, but it also features a strong contingent of entrepreneurs who have made their fortunes in other fields.
Fortescue Metals Group chief executive Nev Power predicts growing demand from China will lead the iron ore price to settle at about $120 a tonne for the rest of 2013, albeit with some volatility.
Authorities in Taiwan are investigating James Packer’s Melco Crown Entertainment joint venture amidst allegations the firm engaged in more than $170 million in illegal transfers.