Startup Vic’s Impact Pitch Night

Due to my personal travel commitments in recent months, it’s been a while since I attended one of Startup Vic‘s regular pitch nights – so I was pleasantly surprised to see that these monthly events continue to draw a solid crowd. As with last year’s impact investing pitch night,  this event was co-sponsored by Giant Leap VC (part of the Impact Investing Group), with support from LaunchVic, who played hosts at the Victorian Innovation Hub.

As usual, the startups pitching appear in the order they presented:

Vollie

This is an on-line platform or market place for helping charities to find skilled volunteers for project-based assignments, mostly involving digital, marketing, technical, professional and advisory services that can be delivered remotely (rather than on-site or in-field).

The founders described the benefits to corporate clients in meeting their CSR goals. These companies either “sponsor” their employees’ time and/or donate money – to be honest, it was not entirely clear how this part worked. And of course, being a two-sided market place, Vollie also charges charities on a per project basis.

According to the presenters, there are 56,000 charities in Australia, and so far the platform has generated $360,000 in “value”.

However, Vollie only assists the charities with project on-boarding, whereas the NFPs themselves are responsible for actual project delivery.

While acknowledging the appeal to Gen Y/Z volunteers, the judges were interested to know how much personalisation the platform offers, and how QA/QC issues were handled. Having served on the board of a NFP myself, I appreciate how much more complicated it is to manage volunteers – from police checks to insurance, from training to risk management.

Cyber Clinic

Claiming to provide easier access (and a better user experience) to therapeutic clinic services, Cyber Clinic enables people to find a professional therapeutic counsellor or psychologist that matches their needs. Essentially an on-line directory for mental health care (part of the growing number of telehealth providers), the service matches clients and counsellors, connects them for sessions that can be delivered remotely and at times that suit the recipient, and measures the results.

Partly developed in response to the high incidents of mental health issues presenting to GPs, delivery of counselling services is via secure video conferencing and consultation, backed up by a dedicated app. The service is designed to run on even low-bandwidth connectivity, making it accessible to regional and country users.

The guiding principles are cost, access and trust (service providers are vetted before being admitted to the platform).

The judges were interested to understand the founder’s patient acquisition strategy, which involves connecting with government agencies, healthcare providers and corporates (e.g., as part of their EAP services) – so it’s clearly designed as a B2B model, plus a direct to market, public-facing website. The judges also wondered about customer retention when measured against outcomes.

STEMSparX

With the declining levels of STEM participation in high schools, STEMSparX is designed to engage younger students by bringing STEM education direct to their doorstep.

The service combines an AI-assisted on-line learning interface with practical DIY kits. Designed around the Arduino Open Source Ecosystem, the business model is based on a B2C subscription service. The founder is a participant in Melbourne University’s MAP programme, and has been running pilot project workshops and developing an engineering curriculum.

The judges wondered how STEMSparX would compete with the likes of Code Academy, and how effective a direct-to-consumer model is, unless it was combined with a channel strategy involving communication with parents, schools and public libraries? Plus, how does a service like this compete with other distractions such as online games, video streaming and social media?

Amber Electric

This alternative electricity seller is offering retail customers access to real-time wholesale prices. By only charging customers a $10 monthly service fee, Amber claims it can pass on the true wholesale price, based on 30-minute price resets (reflecting actual market supply and demand), rather than the fixed rates and price bands that traditional electricity retailers charge.

A key aspect of Amber’s business is the availability of renewable inputs (Australia has the largest % of renewables in the national grid – excluding WA which is not part of the grid…). For example, the increase of solar-generated energy from domestic sources (household rooftop panels) that can be fed into the grid can have an impact on the average unit cost of electricity from non-solar sources, and some resulting market distortion.

The judges were keen to know if Amber applies price loading to take account of passive consumption, and whether their revenue model allows for feedback funding into additional renewables? Another question was whether Amber customers will experience considerable price spikes during the summer spikes?

Currently, Amber is only available to people living in the Sydney metropolitan area, and who do NOT have solar panels (due to the issues of feed-in tariffs?). So, very limited access at present – but clearly a disruptive model that threatens to undermine the highly regulated retail market.

It’s fair to say that Amber ticked the box for most people in the audience, as it won both the Judges’ prize, and the people’s choice.

Next week: Startup Vic’s FinTech Pitch Night

Wholesale Investor’s Crypto Convention

Another day, another blockchain and crypto event. This time, the latest Wholesale Investor pitch fest in Sydney featuring companies that are looking to raise funding from accredited investors – either to invest in other crypto businesses, or as equity in their blockchain projects, or via a token sale.

Fran Strajnar, CEO and Co-Founder of Techemy delivering the opening Keynote Presentation

The pitches were punctuated by a number of keynote presentations, and panel discussions, to provide some context on what is going on in crypto, from a market, technology and regulatory perspective.

The presenting companies ranged from Xplora Capital, a specialist fund investing in blockchain technology, to Enosi, a platform for retail energy distribution. There were a few projects linked to the entertainment and event industry (Zimrii, FairAccess and Hunter Corp Records), and a couple operating in precious metals (MetaliCoin and Kinesis Monetary System). Ethereal Capital is focused on crypto mining, while Horizon State is bringing blockchain technology to voting systems. Systema is using AI on the blockchain to personalise e-commerce, Amber is like Acorns for crypto, Sendy* is an e-mail engagement platform, and Tatau* is building a distributed computation platform for GPU-based machines.

There was no doubting the level of interest in blockchain and crypto among the audience, but whether they are ready to invest is still open to debate. With the markets sending mixed signals (despite the generally positive industry news in recent weeks), institutional money continues to sit on the sidelines awaiting buying opportunities. My guess is they probably won’t want to wait too long, especially if we see the adoption of new security token standards, crypto-backed ETFs, and other asset diversification.

Meanwhile, over at Chartered Accountants ANZ, there was a very interesting seminar on the taxation of crypto assets. While there have been some positive developments (such as dropping GST on crypto transactions), the ATO is still being somewhat ambiguous about the treatment of crypto for CGT and income tax purposes. In particular, whether crypto assets will be recognised on the revenue account, or on the capital account, has implications for crystallising capital gains (or losses), and for carrying forward certain revenue gains (or losses). The inference being, there is a desire to extract as much as possible from accrued capital gains, while minimising the ability to rollover losses (especially given that many investors are probably sitting on unrealised losses if they bought in to the market during the late 2017 bull run). Essentially, crypto is not recognised as currency (whereas in Japan, for example, crypto is recognised as a legal form of payment), but as an asset that at a minimum, represents a bundle of rights. But the same could be said of a software license…

Next week: Tales from Tasmania

* Declaration of interest: Sendy and Tatau are both clients of Techemy, a company I consult to.

 

Startup Exchange, Chicago

As part of its annual FinTech Exchange event in Chicago last month, Barchart* ran the Startup Exchange pitch competition, where 16 hopefuls competed in front of a stellar panel of judges.

The presentations in order of appearance were:

Mercaris – A market data and trading platform for niche agri-products e.g., organic, non-GMO, certified and other niche food products and commodities where identity preservation (IP) is critical.

KTS Operations – A configurable software development solution for data handling and trading. It aims to automate redundant data tasks, such as putting CPU processing on a Blockchain.

HALO – Is a platform for trading structured notes. Currently working with 10 banks and 5,000 financial advisors.

UCX – Offers a consolidated market place and platform for buying Cloud services.

Demand Derivatives Corp – Allows clients to design new derivative instruments for listing on futures exchanges, as compared to standard futures and options contracts. As well as supporting unique instrument design, the service focuses on IP protection, exchange listing and liquidity.

UpTick Technology – Identifying the in-house talent gap at many firms, this spreadsheet-based analytical tool integrates with any data set, multiplies internal development capacity and supports data distribution within the client organization.

MaterialsXchange – Is a raw commodities exchange offering a B2B e-marketplace to digitize and automate trading data. It features a live, two-sided (bid/offer) venue with full execution and delivery, plus connectivity to ancillary services. First product is a lumber market place.

Coinifide – Has launched a P2P crypto trading and auction market place, combining elements of a social trading platform with an emphasis on providing investor education, It features key influencers and subject-matter experts and a simulator to replicate trading strategies.

Upper Room Technology – Is a new analytics solution for professional bond traders, with algo-based modelling and trade execution services.

Tipigo – A decision-support and information tool aimed at self-directed investors and day traders. It combines machine learning and fundamental research (450+ data sources tracking 8,300 US companies) to screen and funnel investment strategies, with trade execute via 8 traditional brokers.

TrendyTrade – Designed to encourage millennials to invest, it aggregates 400+ data sources, as well as Twitter, StockTwits and traditional media. An AI-based algo model makes recommendations, and explains why a specific stock might be moving. Currently has 30,000 users (under a freemium model) and boasts 79% accuracy.

Peak Soil Indexes – Aiming to “democratize farmland”, this is all about so-called “precision agriculture” – financializing farmland, creating a new asset class and offering a passive investment product, tracked by their own farmland index. It recognizes the demand for farmland, while offsetting some of the inherent risks of highly volatile crop prices.

SixJupiter – This is text-based robo advice platform. Focuses on liquidity, diversification and aggressive growth. Data suggests that 36% of the US population don’t get financial advice.

FreightWaves – A trucking futures marketplace, developed in response to a lack of market transparency and the corporate headwind of freight costs. Combines insights from market trends, regulatory factors and the impact of new technology. Primarily a content site, the service has achieved 1 million paid views per month.

PanXchange – An OTC marketplace for physical commodities – agri, energy, food and metals. Provides Instant access to realtime and historic data, for price discovery and for
trading futures and derivatives. Live data includes bid/offer spreads and trades (as opposed to traditional price reporting agencies. Its first key product has been a weekly benchmark price for Frac Sand.

Matrix Execution Technologies – Trading solution for active traders in equities, futures and options. Includes order management and executions services, especially for trading spot markets against listed contracts (such as CME and CBOE Bitcoin futures). Aimed as family offices and HNWIs.

Based on the judges’ verdict, the winners were:

1. PanXchange
2. Coinified
3. FreightWaves

* Declaration of interest: Barchart syndicates Brave New Coin news and technical analysis content

Next week: FinTech Exchange, Chicago

Startup VIC’s Retail & E-Commerce Pitch Night

As with the same event last year, this pitch night was again hosted at the Kensington Clik Collective. Going by the audience numbers, the retail tech and e-commerce start-up sector continues to generate widespread interest, despite (or because of?) the fragile state of most bricks and mortar retailing in Australia, and the onslaught of global online shopping from the likes of Amazon and eBay.

The four pitches in order of presentation were:

barQode

According to the founder, it all started with a scarf… and how he might have paid more for the item at the time he wanted it (but less than the retail price), compared to the eventual discount price a few months later. If only he had been able to bargain on the spot. Enter barQode – a location-specific app that enables customers to make an offer on an in-store item, and retailers to match or counter the customer offer.

To be clear, this is not (yet) a price comparison tool or even an on-line platform – it’s an app aimed at specific, location-defined, in-store purchases.

While simple in concept, the app does require a huge behaviour change by shoppers. Australians are infamous for being “price sensitive” buyers (not the same as being “cheap”, as one retail consultant once corrected me). Cost plays a huge role in purchasing decisions, especially as choice is often limited in a sector dominated by an oligopoly of brands, and a traditionally restricted market in terms of parallel imports and geo-blocking.

But barQode requires Australians to get comfortable with the notion of haggling, and that is quite a culture shift. Yes, some retail brands offer price matching against their competitors, but as this pitch pointed out, this is all about in-store purchases and prompting a more emotional engagement.

Most of the questions from the panel of judges focused on the competition, customer acquisition and market entry. Using a combination of platform fees and analytics services, barQode claims to be cheaper than the competing platforms, which also risk dis-intermediating retailers from their direct customers. Costs of acquisition were not disclosed, since the app is only in very select beta. The founders appear to be targeting discount retailers rather than selecting a specific category launch. This raises the prospect of only attracting bargain hunters who are already tempted by stock clearance offers (a race to the bottom?) – rather than engaging with select brands who can afford to yield some margin while potentially securing a new customer base.

The team claim to have a patent pending (they are working on image recognition, rather than simply relying on bar codes and other inventory data), and is seeking $350k in seed funding prior to a $1.5m Series A.

Epic Catch

Under the banner, “The social collective – date differently”, Epic Catch claims to be fostering organic connections via shared experiences for singles.

I have seen this start-up pitch couple of times before, where the initial emphasis was on being a new kind of dating service. But now, presumably with more experience and more market research, it claims to be addressing the “loneliness epidemic” – despite all the so-called “connections” people have via social media (and given recent events at Facebook, how much longer will that particular trend run?)  there is actually less and less personal engagement in the world.

According to data cited by the founders, in Australia, 35% of households consist of single people, a figure expected to reach 60% by 2036. At the same time, single people (neither age nor other demographics were defined) each spend an average of $12,000 a year on social activities. (It would have been interesting to see a breakdown of this spending pattern by consumer category, season, age, gender and location?)

The business model relies on a mix of subscriptions, commissions and affiliate fees, via a business partner model, member fees and booking fees. The founders are looking to raise $1.5m, primarily to fund marketing costs, as customer acquisition has mostly been organic, word of mouth, and SEO. To help them on their journey, the founders have appointed a solid advisory board, in their quest to counter the “fast food culture of dating and matching apps”.

Winery Lane

Winery Lane is a curated online market place, servicing independent wineries. Currently engaged on an equity crowd funding program (to raise $900k in return for 18% equity), the founders suggest that the $7.5b wine industry suffers from too many brands. A few large names dominate the market (by supply and by retail consumption), and a long-tail of boutique and specialist wine makers struggle for recognition (even though they often have a superior product). The biggest challenge is: producers can’t control the end distribution, especially small producers.

Winery Land has identified three core personas of wine lovers: geek, aspirational, and seeker. Their goal is to connect independent wine makers with this target audience, by removing the risk for sellers – through enabling them to share their wine-making narratives, and only charging a success-based commission on sales.

The business model is to target 50-60 independent wineries, and charge a 30% sales commission, while offering a 20% discount to customers on 12 or more bottles.

Asked by the panel (which included a representative from Vinomofo) about potential competitor Naked Wine, the founders claim they operate in different segments – in particular, their focus on selling genuine wines (and not running private labels).

Behind the platform is a data acquisition component – by “pooling” their mailing lists, participating wine makers can actually reach a larger (pre-qualified) audience. The judges felt that marketplace models for wine are still to be proven, and wine makers are naturally very protective of their customer lists, to whom they can usually pre-sell their normally small vintages.

[As a piece of random market research, the next day I spoke to one wine-seller representing a boutique producer at a pop-up market in the lobby of a CBD office building. He claimed that by participating in a growing number of these pop-up markets around Melbourne over the past 12 months, he had increased the size of their customer list 10-fold. When I asked whether his sales and marketing strategy included using platforms such as Naked Wine, his opinion was these services were often more like marketing software. They may also require producers to discount too heavily, that they resemble something of a bulk distribution model, and that it was akin to a “pay to publish” model for wine makers – based on the cost of getting stock on to the inventory. And while it isn’t perfect, MailChimp was good enough tool for building, engaging with and growing their customer lists.]

Postie

This SME marketing platform highlights a major paradox:  small brands engage better than big brands, but social media and e-mail engagement are both declining.

Using Instagram-based campaigns, Postie has doubled average campaign engagement to around 42%, and tripled typical click-thru rates to 6%. Postie has also reduced the time to create a campaign from 5 hours to 8 minutes.

While there is some template flexibility, there are limited options, as Postie draws on the Instagram design aesthetic.

According to the founders, there are 15 million brands on MailChimp, and 8 million brands on Instagram. What makes Postie different is that it owns its e-mail campaign client, and brands get to control their own retail inventory management.

Despite some of the challenges in SaaS marketing solutions, Postie has seen success with some specific verticals such as hairdressing, but admits that is hasn’t quite got the right product-market fit. As a result, and as a means to scale growth, Postie is starting to train users, to become more of a self-serve solution.

Somewhat surprisingly, the judges voted Epic Catch the winning pitch – I guess it is hard to ignore the founder passion, and the decision to pivot away from being a “traditional” dating platform. Meanwhile, the people’s choice (based on Twitter votes) was for Postie, and by a large margin – I suspect because many start-up founders, entrepreneurs and SME owners in the audience would welcome such a service for their own business.

Next week: The fate of the over 50s….