News, Startups - Written by Renai LeMay on Tuesday, November 20, 2012 11:22 - 0 Comments
Optus makes first startup investments
news National telecommunications player Optus has made its first investments in several Australian technology startups, courtesy of its Innov8 seed fund set up in collaboration with parent SingTel, with local groups 121cast and Venuemob getting the nod for initial capital investment.
Both startups are alumni of the Melbourne Accelerator Program, an initiative of the Melbourne School of Engineering at the University of Melbourne which seeks to back startups being build by students, staff and alumni of the school.
121cast, which raised a funding round of $250,000, led by Innov8 and including the startup’s seed investor, fellow Melbourne-based investment house Adventure Capital, is a company focused on converting information into spoken words, with the intention of providing information and context to users when they need it. The company’s first product is SoundGecko, a free service which allows users to listen to any news article or web page through mobile platforms, and which already has 35,500 users and 2,500 listens a day. However, the company is aiming at a wider target – developing what it describes as a ‘personal radio’ product.
When fully developed, such a platform would allow users to receive a personalised radio feed made up of news, weather, social network updates, podcasts and more, all delivered through a mobile platform. The intention is that this kind of platform could replace existing radio stations during daily commutes, for example.
121cast was founded by well-known Microsoft-focused blogger Long Zheng (who runs the istartedsomething blog and is also involved in the development of Windows Twitter client MetroTwit), as well as Andrew Armstrong and Edward Hooper. 121cast is a resident of the York Butter Factory co-working space in Melbourne, and recently returned from Silicon Valley after exhibiting at TechCrunch’s Disrupt conference.
Long Zheng, Co-founder, 121cast said, “The Optus-Innov8 Seed Program is a significant new opportunity for early- stage Australian startups and we’re very excited to have both SingTel Innov8 as the investment partner and Optus as a strategic partner. With their technology expertise and business network, we believe the support from SingTel Innov8 and Optus will strengthen our product and business development.”
Andrew Armstrong co-founder and lead developer said: “It has been a very exciting journey since we founded the startup in February and launching SoundGecko in July. Now with the strategic investment and support of Optus and SingTel, we aim to accelerate our development roadmap and reach across Asia Pacific.”
For its own part, Venumob is a startup which allows users to book any type of venue online, and raised $450,000 in its own round, led by Innov8. The group has so far focused on providing access to booking spaces in Melbourne, where it currently has more than 300 venues listed, ranging from award-winning bars and restaurants like the Golden Monkey and The Botanical to hospitality groups such as the Publican Group and JBS Hospitality. The group is also looking to spread its wings across Australia and incorporate venues from around the country. Besides giving locals a way to discover and book venues, Venuemob’s service also delivers a chanel channel for owners to market their businesses and generate additional bookings.
The Venuemob founders well-known in Australia’s startup scene. David Wei and Ying Wang previously teamed up to start a group-buying business, Crowdmass, which was sold to Groupon in 2011 in a move primarily viewed as a talent acquisition by the global group buying powerhouse.
David Wei, Co-founder, Venuemob said, “The investment will allow us to catalyse our expansion strategy into other cities, so that we can offer function venues in Sydney and other major cities across Australia. It also opens the door to strategic partnership opportunities with Optus and SingTel Group. The support from the Optus-Innov8 Seed Program certainly reflects the fast-growing nature of the Australian entrepreneurial ecosystem.”
In a separate statement, Innov8 said the pitch round for the funding saw entries come in from all around Australia.
Austin R. Bryan, Vice-President of Digital Communities and Ecosystems, SingTel Group Digital L!fe said, “The first round of the Optus-Innov8 Seed Program received a number of impressive entries that showcased remarkable ideas and concepts. This really validates our view that the startup community in Australia is bursting with talent and we are proud to offer them the opportunity to take their concepts to the next level.”
Edgar Hardless, CEO, SingTel Innov8 said, “SingTel Innov8 complements the Group’s digital strategy by investing in new technologies and entrepreneurial talent worldwide. We are excited to kick off our first investments as part of the Optus-Innov8 Seed Program in 121cast and Venuemob, and look forward to seeing more exciting ideas coming out of Australia.” Further information about the investments is also available in an Innov8 blog post.
I recently had the chance to have dinner with the guys from 121cast and Venuemob, and I have to say that I was impressed with both the technical expertise and commercial acumen that the startups’ leaders demonstrated. Both sides have been involved in startups previously and are highly focused on what they’re doing with their new initiatives. I’m not really surprised to see them pick up nicely sized capital investments like this, and I look forward to seeing what both can do in future. In wider sense, both companies have been supported by several local startup accelerator programs, such as MAP, the York Butter Factory and Innov8, and I think this demonstrates the rapid maturing of Australia’s IT startup ecosystem.
To my mind, I view both startups as primarily acquisition targets in terms of their exit strategies from their businesses. 121cast seems to me to be primarily building a feature, not a new product entirely, and I would be that companies who make mobile operating systems or several different types of mobile apps – or even, potentially, media companies – would be interested in 121cast’s technology if it gets smart enough and popular enough.
It’s a similar situation for Venuemob. The company shares a great deal of similarity with sites such as Groupon, Wotif.com and Realestate.com.au, which rely on a strong physical sales team on the ground to get small merchants across the line to list their offerings online. I wouldn’t be surprised to see a strong player in one of these existing categories eventually expand into venue booking via an acquisition of Venuemob.
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