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Published 26 March 2013 12:27, Updated 23 April 2013 10:54
Telstra’s Kate McKenzie is seeking start-up opportunities. Photo: Nic Walker
The funding landscape for Australia’s emerging companies is looking up, with Telstra on the hunt for new opportunities in the digital media, education and IT services sectors.
The $50 million that Telstra is believed to have set aside for technology start-up investments adds to the $30 million Blackbird Ventures fund launched this month with the support of successful Australian entrepreneurs.
Telstra, like Blackbird, is looking for companies that are small but have gone some way to prove their business models work.
Telstra’s head of innovation and marketing, Kate McKenzie, told The Australian Financial Review that Telstra will be cautious in its approach and wary of companies with no clear business model and no revenue stream.
“We are going to get lots of customers and we will figure out how we make money out of it later. I mean, there are not enough advertising dollars to go around at the end of the day,” she says.
But unlike the Optus-Innov8 Seed Program, which has a mandate to support local start-ups with early-stage funding, Telstra’s investment program has allocated a significant amount of its budget overseas.
Telstra’s investments last year included leading a $35 million financing round for Ooyala, a Silicon Valley-based analytics and video-streaming service, as well as investing in Sydney-based restaurant booking service Dimmi and cloud computing provider IPscape.
McKenzie says she has looked at thousands of companies, with only a handful meeting the requirements.
“[The technology] team has probably looked at thousands of ideas and probably pursued a dozen, and if we are lucky, five or six of those will turn out to be real and substantial,” McKenzie says. “It would be similar on the venture side.”
In related news, Sydney incubator Pollenizer aims to draw new blood into the angel investor community with a $5 million capital raising, hoping sophisticated investors will part with sums as little as $30,000.