Crowdfunders arrive from US
Global confidence in Australian innovation kicks up a notch this week as rival US crowdfunding platforms Kickstarter and Indiegogo host duelling roadshows aiming to lift the number of local start-ups taking their ideas to the world.
Indiegogo is counting on its Australian currency feature, to be launched on Tuesday, to give it the edge with local entrepreneurs. By allowing projects to raise funds in Australian dollars, Indiegogo cuts risk and cost from foreign exchange fluctuations and repatriation. Until now, money raised through offshore crowdfunding was in US dollars.
Co-founder Danae Ringelmann, in Australia this week to meet start-ups in Brisbane, Sydney and Melbourne, says her platform is attractive for Australian start-ups seeking to take their funding global.
"Australia has been such a strong market for us since day one," Ringelmann says. "We're trying to build a global ecosystem where people are bringing their ideas to life."
Indiegogo and Kickstarter are the top global crowdfunding platforms linking individual financial backers to start-up entrepreneurs, and taking a commission. crowdfunding is becoming a popular way for innovators to get their ideas off the ground.
Industry analyst Massolution predicts crowdfunding to raise $US5.1 billion ($5.3 billion) globally in 2013, nearly doubling 2012's $US2.7 billion.
However, watchdogs say crowdfunding does not create a supplier-consumer relationship. NSW Fair Trading cautions those using crowdfunding sites to seek independent legal advice.
Ringelmann says Indiegogo has hosted 150,000 projects and supports up to 8000 to raise "several millions of dollars" a week simultaneously. She cites the Indiegogo fund-raiser for a campaign to get federal Communications Minister Malcolm Turnbull to reverse Coalition policy on the NBN as an example of a successful project. The campaign ended on the weekend raising four times its $15,000 goal to buy ads in Mr Turnbull's local newspaper.
While US crowdfunders are coming Down Under, Australian platform Pozible is tackling them on their home soil, opening a San Francisco office in August. Pozible co-founder Rick Chen says the Americans' arrival is good for Australian start-ups because it raises the general awareness of crowd-funding.
It announced on Monday it will now accept donations in Bitcoins.
Chen says Pozible has helped fund 4500 projects since it launched in May 2010. He says it is less risky than US platforms being based here.
Serial entrepreneur Matt Barrie says the shine on Australia's technology industry extends beyond start-ups to later-stage ventures. Barrie just saw his first company, networking security maker Sensory Networks, sold to Intel for $21.5 million.
"What is quite interesting is once you're doing $10 million in revenue, there's a very active international private equity, late-stage venture capital community that is actively prospecting in Australia," Barrie says.
He points to Accel Partners, one of Facebook's first investors, as being active here since it invested $US60 million in Sydney software tools maker Atlassian. Other US venture capitalists such as Sequoia Capital (Apple, Google), Insight Venture Partners (Twitter), and Summit Partners (McAfee) were also busy in Australia this year.