SingTel and Optus will provide funding and other support for startups in Sydney and Melbourne, under an Australian seed program.
In the next 12 months, Optus and Innov8 – SingTel’s corporate venture capital fund -- plan to award eight startups up to $250,000 each. The arrangement could lead to exclusives for the Optus network, but that would be decided in a discussion between investor and startup, said Innov8 CEO, Edgar Hardless.
The program recognises that “there’s a lot of talent now in Australia,” but “funding is not easy to find, especially in the early stages,” Hardless said. SingTel hopes to provide more than a check, additionally becoming a collaborator throughout the development process, he said.
For Optus, the program could lead to exciting new products and services on the telco’s network, said Optus vice president of digital communities and ecosystems, Austin Bryan. A telco like Optus isn’t structured to be a “nimble innovator” itself, but does have valuable network and device resources to power collaboration with a more agile startup, he said.
The focus of the seed program is on mobile and convergence, said Bryan. The actual product could be focused on the consumer or business-to-business, he said.
Besides cash, the seed program will provide startups with “mentoring, networking and dedicated co-working spaces,” the SingTel companies said. Startups can reach Optus’ Australian customer base and also potentially expand into Asia.
Optus and Innov8 will choose investments largely from a pool of applicants referred by Australian startup incubators, including Fishburners in Sydney and York Butter Factory in Melbourne, the companies said. The first round of referrals will occur next month. Startups also can apply directly during pitch events at the incubators throughout the year, with the first to be held in late July.
To be eligible for the program, the applicant must be a registered Australian company that has set up a team, written a business plan and created a working prototype of its product, the SingTel companies said.
SingTel doesn’t want to be the only investor of a given startup, Hardless said. “We are looking for co-investors,” he said. “We could lead the investment round or we could follow the investment round.”
“We’re not a charity,” he added. SingTel will only invest in startups “we believe are as good as they think they are.” While the seed funding is limited to $250,000 per investment, it’s possible that Innov8 could separately add to the pot, he said.
Hardless denied there was anything wrong with a Singapore company pouring money into Australian startups. “You don’t have to take our money,” he said.
Bryan also defended the seed program’s intentions. Working with SingTel, a major player across Asia, is a great opportunity for Australians seeking to reach the global market, he said.
The program is focused for now on Sydney and Melbourne but could expand into other parts of Australia in the future, Hardless said.
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