TECHNOLOGY SPECTATOR: Australia Post's digital hiccup

Australia Post fails to put the legal shackles on its would-be competitor, while local start-up biNu is on a quest to make 'dumb' phones smarter.

Technology Spectator

The battle for the local digital bills business has taken another interesting turn with Australia Post failing to put the legal shackles on its rival Digital Post Australia. 

The legal battle began in March this year after Australia Post launched its Digital Mailbox service, the launch was accompanied by a move to seek an injunction at the Federal Court to stop Digital Post Australia from using the name for its service. Digital Post Australia was launched in March 2012 as a joint venture between Computershare Limited, Salmat Limited and US-based Zumbox Software.

Australia Post may have naturally been seen as mover in the digital bills space but it was the entry of Digital Post Australia that sparked a real sense of urgency. According to Australia Post, Digital Mailbox had been in the works since 2005 and the company was only waiting for optimum market conditions to launch the service.

However, the company neglected to mention any such plans in 2010, when chief executive Ahmed Fahour touted Australia Post’s digital ambitions. So, Digital Mailbox really was under tight lock and key. That is, until Digital Post Australia showed up.

According to Australia Post, the name Digital Post Australia was "incredibly similar” to the Digital Mailbox service and could potentially confuse people.

Australia Post’s conjecture was based on the premise that Digital Post Australia was intentionally trying to leverage off the brand recognition of Australia Post. There might be an element of truth to that but then again how many ways can you describe a digital postal service? The court was obviously asking a similar question, because Australia Post’s allegations of misleading and deceptive conduct have been comprehensively rejected.

Australia Post may have had the idea in the bag but it’s fair to say that the company may have been lulled into false sense of security. The entry of Digital Post Australia has certainly spurred Australia Post into action and the company has recently signed up two major billers in Telstra and AMP.

As for Digital Post Australia, Salmat and Computershare have a combined share of about 80 per cent of the business of preparing paper bills and with the legal wrangling put to rest the service should be ready for launch later this year. The missing piece of the equation is pricing because Australia Post is yet to reveal its numbers. Digital Post Australia plans to charge 15 cents, minus 3 cents' discount for early users, and it will be interesting to see what Australia Post will charge for Digital mailbox.

Making 'dumb' phones smarter

The Australian start-up sector has always had a reputation of punching above its weight and despite the ongoing debate about whether there is enough juice in the local market for entrepreneurs to tap into, there’s an undoubted interest in our smarts.

The latest recipient of this interest is Sydney-based mobile app platform developer biNu, which has managed to secure a $2 million investment from a group of heavyweight backers, including Google chief Eric Schmidt’s Tomorrow Ventures fund, founder David Risher and’s Paul Bassat.

BiNu is in the business of using the cloud to make ‘dumb’ phones smarter, i.e. bringing smartphone applications to your run of the mill feature phones. The idea of a low-end feature phone may be an anathema to many in the Australian market, given our high rate of smart device adoption, but they are the lifeblood of the mobile revolution sweeping across the developed world.

Since launching 18 months ago, biNu has attracted four million active monthly users and given the sheer size of the market those numbers are only going to tick up in hurry. There’s also a fantastic feel good element to this story, with the platform essentially opening up access to not only apps such as Facebook, Google, Twitter but also more than 100 other services such as books, health information and news. This is about technology making a real difference to the lives of people.

Platforms like biNu are going to be a magnet for global telcos as they jostle to carve up the evolving markets in Asia and Africa. Despite the rapid growth in high-end smartphones, lower-end smartphones and feature phones still outsell them by about five-to-one and biNu has certainly positioned itself in a highly lucrative segment.

Bridging the capital gap

In other start-up news, there are encouraging signs of maturity in the local space with a new venture capital fund, Blackbird Ventures, in the works. The fund brings together the cream of the Australian start-up crop with Atlassian founders Mike Cannon-Brookes and Scott Farquhar, Startmate co-founder Niki Scevak and Larry Marshall, Silicon Valley-based managing director of Southern Cross Venture Partners, part of the 14-man investment team.

Led by Bill Bartee, managing director of Southern Cross Venture Partners, and Richard Baker, former portfolio manager of venture capital at MLC Private Equity, BlackBird Ventures is keen to carve out a new space for itself in the local scene.

It’s actually pretty easy for local entrepreneurs to find willing angel investors, provided they have a viable idea. However, things can change pretty quickly when they need capital to make the transition from an early-stage business to a medium-sized one. The sweet spot for angel investors is the $1 million-$2 million range anything more than that and the capital dries up.

This is where Blackbird could end up playing a crucial role, as a bridge that helps start-ups cross that chasm from a good idea to a mature business.

Speaking of mature businesses, Melbourne-based online graphic design marketplace, 99designs, has made its first ever acquisition picking up its largest European competitor 12designer.

Berlin-based 12designer, backed by Spanish venture capital firm Grupo Intercom, is the leading creative design marketplace in Germany and the second largest in Europe after 99designs.

99designs, backed by Accel Partners, raised $US35 million in Series A funding last year and chief executive Patrick Llewellyn said that 12designer's deep regional marketplace expertise and multi-lingual capabilities will be a valuable asset for the company .

The company has appointed 12designer founder and chief executive Eva Missling as the new general manager of the European operations. She will also continue to oversee 12designer, which boasts a community of more than 20,000 designers, and develop a 99designs team in Berlin.

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