SingTel has cut the "start-up" grass of Australia's biggest telco Telstra, which could suffer for its neglect of local grassroots entrepreneurs.
The Singapore-based $200 million venture capital fund Innov8 will bridge the tech investment valley of death in Australia. Over the next year, it will tip up to $2 million into a maximum eight Australian fledgling companies — ideally, graduates of the Pushstart and Startmate accelerator programs, which traditionally struggle to secure local sources of investment to achieve the next level of growth.
Conversely, Telstra last week announced that it had led a $35 million Series D investment round in Silicon Valley video streaming company Ooyala, and has also announced a co-investment with Village Roadshow, in a Melbourne restaurant booking website, which has already raised $2 million and boasts an impressive list of board members and investors.
Both are on the search for technology investments that provide a competitive edge for existing products and services and/or access to new markets, but both are approaching the issue with very different attitudes.
The SingTel fund is the crowning achievement of months of investment and "sweat equity" tipped into the local ecosystem by Optus' Peter Huynh and Rebecca Hay. They supported Startup Weekend organiser Tyson Lundbech by being the premier sponsor of events in Melbourne last year and Sydney last month, which awarded $5000 cash to the winners. Alongside SingTel Innov8 CEO Edgar Hardless and investment manager Monica Tsai, they sacrificed weekends to advise and encourage the Australian wannapreneurs, and generously offered their time and opinions about the local ecosystem. This community outreach laid the foundations for the seed investment program, bound to secure stakes in some of Australia's highest potential companies.
By comparison, Telstra is virtually invisible from community events and local community leaders have widely panned its approach, complaining that it is impossible to locate the 20 Telstra staff members whose job is to invest in local tech companies. Telstra ignored repeated requests for an interview with Matthew Koertge since his appointment as the head of the $50 million apps and ventures group, at the start of the year.
Telstra has fast become a white whale for entrepreneurs in the Australian tech industry.
If Australian corporates seriously want to provide more than lip service to local entrepreneurs, they must come down from their high horse and get their hands dirty in the start-up sandbox.