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.”
Schwark Satyavolu is a general partner at Trinity Ventures where he makes early-stage investments in fintech, security and AI. A serial entrepreneur, he co-founded Yodlee (YDLE) and Truaxis, both of which were acquired. Previously, he held senior executive positions at LifeLock and Mastercard. He is an inventor on 15 patents.
We are living through one of the nation’s longest periods of economic growth. Unfortunately, the good times can’t last forever. A recession is likely on the horizon, even if we can’t pinpoint exactly when. Founders can’t afford to wait until the midst of a downturn to figure out their game plans; that would be like initiating swim lessons only after getting dumped in the open ocean.
When recession inevitably strikes, it will be many founders’ — and even many VCs’ — first experiences navigating a downturn. Every startup executive needs a recession playbook. The time to start building it is now.
While recessions make running any business tough, they don’t necessitate doom. I co-founded two separate startups just before downturns struck, yet I successfully navigated one through the 2000 dot-com bust and the second through the 2008 financial crisis. Both companies not only survived but thrived. One went public and the second was acquired by Mastercard.
I hope my lessons learned prove helpful to building your own recession game plan.
Fintech startup Revolut lets you earn interest on your savings thanks to a new feature called savings vaults. That feature is currently only available to users living in the U.K. and paying taxes in the U.K.
The company has partnered with Flagstone for that feature. For now, the feature is limited to Revolut customers with a Metal subscription (£12.99 per month or £116 per year). But Revolut says that it will be available to Revolut Premium and Standard customers in the near future.
Savings vaults work pretty much like normal vaults. You can create sub-accounts in the Revolut app to put some money aside. And Revolut offers you multiple ways to save. You can round up all your card transactions to the nearest pound and save spare change in a vault.
You also can set up weekly or monthly transactions from your main account to a vault. And, of course, you can transfer money manually whenever you want.
Metal customers in the U.K. can now turn normal vaults into savings vaults. The only difference is that you’re going to earn interest — Revolut pays that interest daily. You can take money from your savings vault whenever you want.
Revolut promises 1.35% AER interest rate up to a certain limit. If you put a huge sum of money in your savings vault, you’ll get a lower interest rate above the limit. Your money is protected by the FSCS up to a value of £85,000 for eligible customers.
By Andres Ricaurte, Senior Vice President and Global Head of Payments, Mphasis
In the past few years, as fintechs have increasingly come into play on the global stage, not only have they shaken up the way in which traditional business is done – but they also shone a light on the need for significant innovation in the payments space.
For banks and other financial services providers, global payments revenues were $1.9 trillion in 2018, of which half were B2B. The sector represents a significant growth opportunity and is attracting major attention from emerging digital players. One thing is clear – banks and technology players are no longer separate entities but two interchangeable sides of the same coin.
As payment digitalisation continues to take place, how can providers ensure that they adopt technological advancements in 2020 to address some of the industry’s most challenging pain points and create unique angles to stay ahead of the curve?
Planting the seeds for success
Looking back over 2019, we saw B2B payments continue to move towards modernisation, particularly as businesses began to look at their end-to-end processes more holistically, utilise data more effectively, and replace their old systems with more nimble digital solutions.
One of the major trends has been the merging of accounts payable and accounts receivable data, feeding into a growing requirement from customers for a higher level of visibility and control to drive better business decisions. As a result, providers must start taking a wider view that encompasses both of these critical processes, to deliver more meaningful insights and help businesses optimise what have typically been two separate sides of the same coin.
Certainly there have been some teething issues to resolve, such as inconsistent tools and processes for businesses to share information with their buyers and suppliers, as well as associated privacy and cyber security issues that arise from the adoption of more open data frameworks.
While some progress has been made, particularly through the creation of ‘closed-loop’ buyer-supplier networks and ecosystems, there is significant room for improvement. Software and financial services providers alike are finding their feet in terms of capitalising on data to create truly intelligent and context-aware B2B payment solutions.
What other key trends will 2020 bring?
In the year ahead, I anticipate that AI and machine learning will play a huge part in shaping the future of B2B payments. As businesses continue to digitalise payments, invoicing and other trade-related processes, richer and larger data sets will increasingly become available. These technologies will pave the way for real-time data analytics and actionable insights. They will also help drive operational efficiencies through cutting down on the cumbersome (and error-prone) manual labour traditionally used to perform functions like cash flow management and forecasting.
Additionally, SaaS adoption will gain even greater momentum, especially in the areas of treasury, accounting, order to cash, and procure to pay, which will change how corporates consume financial services and choose payment providers.
We will also see major disruption in how employees pay for day-to-day expenses thanks to the rapid adoption of B2B mobile capabilities, new payments form factors and innovative configurations for expense accounts. One of the knock-on effects is that traditional cards and expense reports will start becoming obsolete.
Last but in no way least, digital currencies will remain on the worldwide agenda. Leading financial services institutions and governments alike are evaluating and testing the pros and cons of blockchain technologies in re-designing the money supply chain. Consequently, it’s likely that new use cases for payments and settlements will not just appear, but begin to see early stages of market adoption.
Overall, while progress in payment digitalisation will be different across sectors, geographies and segments, embracing a digital-first, data-centric approach across all aspects of B2B trade and commerce is a must-have for businesses looking to future-proof their operations.