While much of the Australian startup scene is attempting a Silicon Valley redux, only with far less people and more sunshine, a number of key players are looking to China.
On Thursday, the startup hub Fishburners announced it would be launching its first overseas office in Shanghai this month. The company currently hosts around 170 startups in Sydney, and the Shanghai space will have 50 desks to start with, CEO of Fishburners, Murray Hurps told Mashable Australia.
It will act as an outpost of the current Fishburners community, he added, and as a supportive landing pad for startups looking to investigate the Chinese market.
“If you’re in a group of startups in Australia and you’d like to go to China to try addressing a market or address an investor, it’s nice to be able to do it with those other startups,” he said.
Hurps also hopes interest will flow in reverse, resulting in new partnerships. Having a hub in China signals to the community that Australia is eager to talk, he suggested, whether to investors or other startups. “There are so many opportunities in Australia. For example, agricultural technology, smart city technology — where there are also great things happening in China.”
The Sydney financial technology hub, Stone & Chalk also announced the first three startups to participate in its FinTech Asia incubation exchange Wednesday. The Chinese startups, selected after a final pitchfest in Shanghai, will be given a three-month residency in Australia along with local mentorship and investor meetings.
Stone & Chalk CEO Alex Scandurra told Mashable Australia the organisation hopes to be a leading fintech hub in Asia, and such partnerships will be key.
“You’ve also got to be able to attract the best talent,” he said. “The whole idea is providing mentorship, hooking them up with investors, putting them in front of our partners, so hopefully there’s potential for them to stay and use this as stepping stone to the U.S. and Europe.”
Stone & Chalk also took 10 Australian fintech startups to China in April to give them a crash course in what it’s like to do business there. Scandurra said for the moment, he doesn’t see the need to open a stand-alone Stone & Chalk space in China.
The Australian government will be providing landing pads for Australian startups in five cities including Shanghai as part of an initiative announced earlier in the year.
Are we a little late?
For all the excitement about Australian startups making it on the West Coast, China may have been a little neglected.
In Hurps view, Australia isn’t late to the China party, but could it be doing better.
Most importantly, Australia’s startup scene is often too inward-looking. “People tend to go up to the markets that they know well,” he explained. “They’ll solve their own problems, and they’ll do it in a local market. Australia is dangerous because it’s just big enough that you can have a big interesting company but not a globally scalable company.”
“Australia is dangerous because it’s just big enough that you can have a big interesting company but not a globally scalable company.”
In his view, we need to not just say “China is big.”
“Say they’re doing wonderful things around smart city initiatives or around clean technology, and here are companies that would like to talk to Australian startups with that kind of technology,” he explained.
According to Scandurra, the Australian startup community is now able to approach China in a manner that wasn’t possible before. “The free trade agreement makes a big difference,” he said. “It makes the posture of the governments in China much more receptive.” The China Australia Free Trade Agreement took effect in Dec. 2015.
China is not the only focus, however. Stone & Chalk has struck partnerships with Korean fintech groups, Korean Fintech Centre and Yello Financial Group, as well as engaging in some early discussions in Singapore.
“I don’t think there’s one market and that’s it. It depends on the type of startup you are and which market is the right fit. That should trump any trends in China,” he said.
After all, it’s not that simple to cross borders and launch into China. He advised the startup community to continue building bridges, but with care. “I’d encourage them to reach out, and make sure they’re clear in terms of the risks.
“You can burn a lot of time, and time is money … To be honest, one of the key things we learnt in China is the complexity of the market and the dynamics in terms of relationships. You have to partner with the right people and organisations.”