BlueChilli is reviewing its SheStarts accelerator backed by ANZ Banking Group, MYOB, LinkedIn, Microsoft and Google and last week revealed it was launching an accelerator in partnership with Rio Tinto and Amazon focused on ‘scale ups’, successful startups looking to grow further.
Sebastien Eckersley-Maslin, chief executive of BlueChilli, said the accelerator had in the past championed “super early stage entrepreneurship” but would now focus on alumni and scale-ups.
There is a realisation that later stage companies provide a safer bet.
“I think what we are seeing now is a realisation rather than a fundamental shift,” Mr Eckersley-Maslin said. “There is a realisation that later-stage companies provide a safer bet. Working with an early-stage startup is difficult.”
Paul Bassat, co-founder of venture capital firm Square Peg Capital, said over the past six or seven years a lot of funding options had opened up in the startup sector including venture capital funds, accelerators, incubators and angel investors.
“The general trend has been a significant uptake in activity. We will always see within that a waxing and waning of some players,” he said.
Mr Bassat said the current movement showed the importance of long-term investors in the sector such as venture capital funds.
“It is really, really important to have a number of venture funds there over a long period of time because corporate activity will always change,” he said. “It’s perhaps a natural progression.”
Pip Marlow, head of Australia and New Zealand for Salesforce, said corporates have an important role to play in the startup sector with Salesforce launching a $50 million fund earlier this year aimed at financing Australian startups in the Salesforce ecosystem.
Ms Marlow has experienced a corporate abandoning its startup play in her former role at Suncorp where she was chief executive of the bank’s marketplace strategy which ended up being shelved as “too ambitious”, leading to her departure from the bank.
“I think having been on the other side recently, when you’re in a large organisation, you want to have an innovation agenda but I think you’ve got to have an innovation agenda that’s fit for purpose,” she said.
Ms Marlow said corporates need to ask what role they see startups taking in their company and consider whether they want to create innovation to help disrupt themselves, to assist with product development, to strengthen their brand and reputation, or as an investment decision “hoping for the next unicorn”.
“I think sometimes companies go and start something and don’t finish it because they weren’t clear on the purpose in the first place,” she said. “There are amazing things out there, BlueChilli and a tonne of others out there, so how can you tap into those communities and help them but also learn from them? I don’t think you have to run your own, but I do you think having your fingers in there and figuring it out is a good way to keep a good pulse on innovation and get some symbiotic benefit from it.”
Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne