• Great articles on other sites
  • RSS Great articles on other sites

  • Featured, News - Written by on Thursday, August 19, 2010 15:10 - 9 Comments

    Australia gets its own Y Combinator-type fund

    A close-knit group of Australia’s technology startup elite has formed a new seed fund that will offer small investment rounds and up-close mentoring to local technology startups, in a similar model to famed US incubator Y Combinator.

    Dubbed Startmate, the fund has been created by Homethinking founder Niki Scevak — who has also been involved in a number of other startups such as the BookmarkBox. The fund surfaced today at the Tech23 event held in Sydney, which highlights 23 up and coming companies and connects them with investors, mentors and the press.

    The list of those involved in the fund — contributing money and advice — reads like a who’s who of Australia’s startup sector. Former Realestate.com.au chief Simon Baker is also involved, as well as the two founders of local firm Atlassian, which recently took $60 million in funding from US VC firm Accel Partners – Mike Cannon-Brookes and Scott Farquhar.

    Bart Jellema, who recently sold his company Tjoos, is involved, as well as Ryan Junee, whose company Omnisio was bought by YouTube. Mick Liubinskas, the co-founder of local startup consultancy Pollenizer, is involved as well as Phaedon Stough, the managing partner of recruiter MitchelLake. And there’s one venture capitalist — Bill Bartee, a general partner at Southern Cross Venture Partners.

    And that’s not the whole list — there are many more entrepreneurs involved.

    According to one – Alan Jones, the founder of Doing Words, who is also involved with Pollenizer and has worked for a host of other online companies, Startmate will invest $25,000 each in local startup companies that it approves, with the process to kick off in January.

    “It’s a Y Combinator model – very early stage – for people whose credit card is about to max out,” Jones said in an interview today from the sidelines of Tech23.

    Successful applicants will gain access to the extensive experience of the fund’s mentors, and will go through a development process. And there are demonstration days being planned both in Sydney and in San Francisco – with the fund to fly its companies to the US to present.

    The fund will take an equity stake in the companies it invests in, but not a set amount, with Jones noting it was difficult to speculate on what it could be for each company, although it wouldn’t be a controlling stake.

    Y Combinator similarly makes small investments in companies – rarely more than $20,000, and takes small stakes of between 2-10 percent. Applications for the first round will open in October this year and close in mid-November, with five initial startups to make the grade.

    “We’re not looking to make this a massively profitable enterprise for us,” said Jones. “It’s just something we’re going to do that we think the industry needs.”

    The fine details of how the fund will be structured are still being worked though – with Jones joking that Startmate’s web site doesn’t even have a logo yet. But like the startups it will foster, it will seek to operate on a “lean” model, which Jones said was probably the way forward for the majority of local startups.

    “The biggest risk in a startup is not whether someone will steal your idea or if you can build a product but rather that no one will care,” states the site. “Startmate is designed to help you win your first customers and work through the initial stages of customer discovery.”

    Image credit: Nathan Sudds, royalty free

    submit to reddit


    You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

    1. Kim
      Posted 19/08/2010 at 3:33 pm | Permalink | Reply

      Im 19 and have been following the tech scene for 3 years. I’ve always wanted to start something and but have had the opportunity to do something as there aren’t knowledgable, experienced people to help. This is what i’ve been waiting for!!!

    2. Posted 19/08/2010 at 4:12 pm | Permalink | Reply

      @Kim – I’m excited that this is happening and think its a positive step for the innovation and startup industry in Australia, but I disagree that to date there were no other resources.

      There are heaps of people out there if you know where to look. You need to hustle and network. There are a number of networks, such as The Hive (http://thehive.org.au/), and many entrepreneurs who are a bit further along in the curve who are more than willing to give advice etc. Most people (from my experience) who have come up and are now ‘doing it’ are very generous with their time, and want to help others who are trying to start something.

      Sure – we’re not the Valley, but we’re definitely not devoid of any resources.

    3. Posted 19/08/2010 at 5:39 pm | Permalink | Reply

      Not being the valley is a terrible excuse and doesn’t wash with me. We’ve got plenty of great people here. It just takes tenacity to find them.

      Also, to clarify, my involvement is to represent Pollenizer.

    4. Posted 19/08/2010 at 10:30 pm | Permalink | Reply

      This news is really exciting. I’m quite glad that I’ve finally found and stumbled onto the Australian startup scene. Quite a dynamic community and lots of enthusiastic people!

      The Tech 23 event held today was great. Some interesting internet startups included ReadCloud, Portable, SolveXia, Taggle and Brain Gauge… out of the many…

    5. Jason F
      Posted 20/08/2010 at 12:08 am | Permalink | Reply

      [edited — note, I have edited part of this comment as it may have been defamatory. I will re-insert the text if I can verify its accuracy — Renai LeMay]

      Meanwhile, I think this is great for Australia, but worry about the guy running it. He seems to have no experience raising VC capital, and missing the big factors that make YComb a success, a set of investment docs and experience. So many of those involved have never raised any VC funds. Scott F for instance has just now taken funds after years and years of speaking at local gatherings about how CRAP everyone that takes VC is. Seems really silly.

      No one seems to have paid to get local investment docs drafted – how can such small investments be justified otherwise?

      • Posted 20/08/2010 at 7:12 am | Permalink | Reply

        Jason, there are bigger things to be worried about than investment docs. For the record, we have DLA Piper/DLA Phillips Fox who are a legal sponsor of the program. They have agreed to create a seed agreement (which we will likely make completely public) and offer free legal advice for the initial three months. A partner in the valley, Richard Horton, is moving back to Sydney and will directly counsel the startups.

        Also, to be clear, this isn’t VC money by any stretch: It’s a mentor-driven seed fund. That means that we know that people can probably russle up $25k from an uncle and the cash provided is not what we are competing with. Rather we have more than 20 people who have created and operated startup businesses and that can help companies win their first customers. Because of that we believe we can increase a startup’s chance of success.

        Finally, if the businesses choose to raise angel financing every one of the mentors will help with that and most of the mentors are active angel investors themselves.

        Over time, as the program scales up the startups will also have the benefit of being apart of the alumni network that we hope will become an ever bigger help to those getting started.

      • Bryce
        Posted 20/08/2010 at 3:16 pm | Permalink | Reply

        I think you’re missing the point here. This sort of thing is great for the young (in age or experience) startup community and is exactly the formalised system people are looking for. Right now it takes a lot of networking and tenacity to meet the right people that are kind enough to give their time and knowledge as generously as they do. This business will serve as a stepping stone for those who wish to move beyond learning through the good will of others to take their business to the next level.

        Your cynicism feels unecessarily negative, but that’s the tragedy of written text. You’re comment may well have been well intended criticism, but I feel it has fallen well short of that.

        I really look forward to seeing what grows from this fund and will be recommending it to people who it would be of benefit, should I come across any.

    6. Posted 20/08/2010 at 9:27 am | Permalink | Reply

      Excellent news, great to see the right people getting behind something like this.

    7. Posted 01/12/2010 at 1:19 pm | Permalink | Reply

      How does this relate to the Playford Capital organisation in South Australia? They’ve been running (with significant state government funding) for a number of years now providing some VC-style cash and business training and support to startups.

      Anyhoo, glad to see there’s more support for entrepreneurs out there.

    Leave a Comment


  • Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:

    Follow us on social media

    Use your RSS reader to subscribe to our articles feed or to our comments feed.

  • Most Popular Content

  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, the $250 million project has not precisely been going well.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT

    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications

    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry

    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights