A decade ago, it was dormant with just a few major local venture capital fund players. Fast-forward 10 years and the market’s burgeoning as the Australian economy transitions and startup sector flourishes with fintech disruptors.
There are now more than 30 active players in the local venture capital market with various business models and strategies in play including stand-alone venture capitalists and major corporate players.
These include organisations like AirTree, a $250 million fund, SquarePeg a fund rumoured at around $300 million alongside new corporate players like Telstra, NAB and Westpac.
Danny Gilligan (Reinventure), Todd Forest (NAB Ventures), Paul McCarney (CEO Data Republic) and Vaughan Chandler (Qantas) PHOTO DAMIEN FORD
Todd Forest, Managing Director for National Australia Bank’s $50 million venture capital arm, NAB Ventures, has been impressed with how the Australian market has picked up speed in the last decade.
“The startup ecosystem is 10 times better than it was just a few years ago with more young entrepreneurs wanting to launch startups, more angels willing to back them, more venture to help them grow, and success exits that are re-enforcing the cycle.
“There have been a lot of great companies built in marketplace and services, and we’d like to do the same with fintechs that will enhance the NAB customer experience through our alignments with them.”
Forest, an experienced entrepreneur and angel investor who hails from Vermont in the USA, said there were a number of key players in the Australian market now who had gained experience abroad and were adapting that to the local environment.
It’s been terrific to have several startup success stories in Australia over the last several years, including IPOs for Atlassian and Freelancer, and the emergence of fast growing startups such as Campaign Monitor, Canva, and Unlockd. These stories will inspire the next generation founders to take the leap and create the next big idea.
For NAB’s exploration into venture capital, Forest says the bank is primarily looking to take minority stakes in startups which helps provide the financial muscle they need to grow quickly, while giving the bank a seat at the table and eyes, ears and influence on new technology and developing trends.
“We know that banking is undergoing significant transformation in the digital space and the simple aim of NAB Ventures is to help ensure we can embrace the right changes to deliver new customer solutions,” Forest said.
“We work with startups that have a product and customers already, but want to grow their businesses and opportunities faster.
“So for us, the key criteria is whether we can help the startup accelerate their growth via our capital and strategic assets and in turn, can that startup bring innovation and solutions to help us better deliver for our customers.” Having appointed Forest to lead the fund earlier this year, NAB Ventures has now spoken with more than 300 startups and made its first investment in May in Sydney-based startup Data Republic.
Founded by Paul McCarney and Danny Gilligan, Data Republic is a platform for data exchange between platform partners and contributors with the aim of enhancing the personalised customer experience for those companies using the platform.
“Data Republic is doing some really innovative work to improve the personalisation experience for customers,” Forest said.
“This investment gives us a seat at the table to help develop Data Republic’s capabilities and ultimately improve the experience for NAB customers in the future.”
Forest said NAB Ventures was looking to make a number of further investments before the end of the year.