19 Hot Australian Startups to Watch in 2015

by Mike88Dec 9, 2014

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Pitch your Startup, App or Hardware or post a Startup Event or Startup Job

Ed: An edited version of this article will be published in the December edition of My Business Magazine

Introduction

I spend a lot of my time reviewing inventions and startups ideas and attend numerous pitch events, mentoring programs so I see a lot of pitches, some are great, others less so.

So I know bad when I see it, likewise occasionally I come across companies that I think are on the path to success.

There a few things we look for reviewing a startup.

Solving a Real Problem.

We really need to believe it’s real and significant pain to someone. I see a lot of businesses solving non problems (I have been guilty in the past) or me too providing solutions. If no one really cares about the problem you are solving, then your business doesn’t have a future.

Team and Execution

We look for teams that are strong both technically and commercially with evidence they can execute. I met some the companies listed below when they were still at the idea stage and since seen them build working businesses. That gives me a lot confidence in the entrepreneur that they are going to continue to execute.

Scalable Customer Acquisition & Service Delivery

Have they worked out how to cost effectively acquire new customers. Can they scale service delivery with minimal effort, if they are doubling users every month, do they have to recruit 100 new staff each month or press a button and launch 30 virtual cloud servers? Most businesses are not built to scale, either the product, people or the process will break. Generally they either can’t acquire sufficient customers or the product/service can’t be replicated at high volume without increasing costs or headcount even faster. This is typically why we see software/ web application businesses being valued at such high multiples or even pre-revenue.

A great example is the new business software app called Slack.com from the US. In less than a year they have grown from launch to 120,000 paying business customers, TinyBeans has grown zero to 500,000 users in under two years, Canva has gained 1 million users in a year.

Software driven businesses are one of the few ways companies can create massive levels of growth without increasing headcount, each new customer provides incremental revenue with almost negligible cost increase.

Electronic Hardware is much harder but will scale well if you have great product design, customer acquisition, rock solid manufacturing, logistics and a reliable product. If you have a reliable product you will do well, however if you ship a batch of product with problems it will sink your company.

Some of these businesses have already raised capital and have serious revenue or users and valued at $100 million plus, others are still at a very early stage but appear to have their business model working and may be looking for capital.

Its probably too late to invest in the former, once professional investors are involved its almost impossible to get into a fund raising but some of the later group may be looking to raise money in the new year.

If you are interested in Angel investing you could start by registering on Angel list or our local crowdfunding platforms ASSOB  or attending some of the Sydney Angels events. Also launching next year is

If you want to see more early stage companies follow me on Twitter @MikeNicholls88 or subscribe to our regular email updates in the sidebar.

I believe the 19 businesses listed below are going to have a great 2015.

High Growth

Pocketbook

Pocketbook-App-img-all-devices-1

What? Online personal finance service which aggregates all of your personal finance statements, income, spending and budgeting.

Why? No one has done a good job of this in Australia. I met one of the founders a few years ago when he was pitching at a Sydstart (the biggest startup conference in Australia). He told me he was going to create a service that allowed people to see all their finances across all their bank accounts and credit cards.

I though he had no chance of convincing the 20 or so banks that matter to give him access to their systems, I also though he would have a hard time engineering a web application that would pass the banks security requirements.

Turns out two years later they have managed both and are growing quickly and have raised a small funding round and are frequently near the top of the Itunes Finance App list.

I expect they will either raise additional capital to continue growth or someone with deep pockets will make them an offer they can’t refuse.

Stockspot

Stockspot

Stockspot

What? Online automated fund management service with lower management fees and less human error.

Why? The managed fund industry is ripe for disruption. Humans suffer from a lot of biases, Fund Managers try to outperform the index by trying to pick winners but 70% of them under perform the general market after their fees are deducted.

Stockspot is a similar business model to Wealthfront in the US which has been wildly successful growing faster than any fund manager in US history.

This is not an easy business to setup, barriers to entry are relatively high to new competitors, existing fund managers are conflicted and probably can’ adjust their business models or costs to compete.

Their website offers a very compelling story, their business model is clear cut and will scale very well if they can keep customer acquisition costs under control.

This is also a very sticky business, customers rarely switch fund managers. I believe there is an general mistrust of the funds management industry so a manager who is aiming to reduce management costs and provide transparency around the investment process with a slick customer acquisition routine is probably going to be successful.

Vinomofo

Vinomofo

Vinomofo

 What? Wine Ecommerce

Why? These guys are simply the best online email and video marketing company I have ever seen.

Wine is not a particularly easy e-commerce business, the freight costs are high and its tough to deliver a single case of wine to the consumer at a cost that matches the big liquor chains sale price at the store and the whole industry has an endemic discounting culture.

The one thing that singles these guys out is their relentless marketing execution and customer acquisition and in most businesses that is the biggest battle.

Shoes of Prey

Shoes of Prey

Shoes of Prey

 

What? Online custom shoe maker who lets you design your own shoes and then makes them and ships them to you.
will make a shoe to your design and ship in

I like the concept and they have traction, most e-commerce companies resell other brand merchandise which is a high volume low margin game and most of them struggle to get scale.

Marketing, shipping and inventory costs make it a tough business for all but the enormous and the very niche.

Shoes of Prey own and make the product so they capture a much larger share of the margin in the supply chain and they have an incentive to invest in their own brand.

This model also benefits from not having to stock which is attractive, I imagine they actually generate net cash as they grow as they probably don’t have to pay the suppliers for a few weeks after receiving the cash from the buyer, I like this concept a lot and there isn’t many businesses that can pull it off.

They have also just struck a deal to expand in the US by opening counters in Nordstrom department stores which is a massive win.

Airtasker

Airtasker

What? Airtasker.com is a web service that allows consumers/businesses to post tasks or jobs they want performed and service providers or individuals to bid for the jobs.

Originally it was pitched at individuals doing tasks for other individuals but has turned into a significant lead generation service for businesses.

Why? They fill a gap in the employment market and are producing good gross margins (~15%) with strong growth on approximately $1 million in revenue a month.

They have traction in a double sided market, these are hard to attack, in order to be successful you need to have both critical mass of both consumers and service providers, if you are missing either you don’t have a service.

Generally double sided markets end up with a few large competitors and are tough to crack once established, it appears Airtasker is going to be one of the winners for casual labour.

Canva

Canva
What? Canva is an online graphic design tool that does just about everything your average user needs to create great quality banner ads, newsletter designs and other business graphics with prebuilt templates and thousands of images and effects available with templates setup for creating and operating Social Media accounts.

Professional quality graphics design is typically the domain of hipster designers who speak a different language, wear different clothes and generally don’t work for you. They use tools like Adobe Photoshop and Illustrator that cost $1000s and have all sorts of tricks to create beautiful work.

Why? The company hit a million users within 12 months of launching. The app is slick and works extremely well and replaces a very expensive suite of products for the majority of business users.

The CEO is the networking master of the universe and has convinced a very high profile set of investors to both invest and publicly promote the platform including Guy Kawasaki who is an icon in the tech and startup industry.

This will be a major business.

TinyBeans

TinyBeans

What? Social Network for new parents

Why? This site is experiencing hyper growth, in October 2013 they had 40,000 users, in October 2014 they have over 500,000 users. Just raised $2 million in September. Great monetisation opportunities.

Catapult Sports

Catapult-Sports Catapult

What? Catapult Sports is a wearable sensor package for professional sports people that tracks their training and game performance and provides performance data back to their coaches and trainers in real time. Think of it like a Fitbit on steroids

Why? Catapult is on fire, they recently raised capital from Mark Cuban the US Billionaire owner of the Mavericks Basketball team.

They dominate a new market which is growing very quickly, they have hundreds of professional, national and Olympic teams using their product with strong positions in US NFL, Rugby League, Rugby Union, Soccer (football), every Australian Football team, Basketball and various athletic disciplines.

Expect a year of strong growth, expect to see the data gathered from the athletes shared on the TV/Web and possibly an acquisition offer from a large player such as Google, Apple or Nike (yes, completely different industries) or Fitbit.

wattcost

What? Wattcost is a smart power meter that can adapt to existing meters both digital and analogue and provide power monitoring and help reduce power consumption.

Why? This industry is ripe for efficiency gains, we have no idea how much power we use until we get the bill. We would however like to reduce our costs and consumption, but its not possible to get this information in real time.

Existing smart meter solutions require an electrician to attend the site and remove and replace your meter with a smart meter. The costs can be significant.

Some newer homes have smart meters but are primarily for the benefit of the energy company, there is no software or systems to help the user save energy.

Wattcost is user installable and works with both digital and analogue meters and is shipping now. Expect either a huge capital injection or a big acquisition offer in 2015.

Special Mentions

These companies are still very early stage, some have only just started shipping product but I think they are going to be special.

Tzukuri

TzukuriSmart fashionable glasses with bluetooth embedded in the frame so you cant lose them. Massive press coverage in the last few months and rumoured to have a deal with a large Multinational electronics company to sell these in their stores.

Vistr

Vistr-Screenshot

What? Cash Flow Management for Businesses – Integrates with Xero

Why? Real Problem, cashflow management has been a problem for businesses forever, very few workable software solutions exist, most small business accounting software does not solve this problem well.

I met the founders a year ago when this was an idea on a whiteboard, they have executed well and now have a working business model and paying customers.

Cartesian

cartesian-argentum-1024x575

Launched the Argentum printer earlier this year which prints PCBs (the green boards in electronics) Given electronics hardware has seen a massive resurgence in funding in the last year, I expect their product to be very popular.

Podplants

Podplants

New hydroponics solution for making greenwalls in commercial buildings (ie walls of flowers and plants). I have seen this founder iterate his initial concept through a bunch of variations from idea to shipping product and he now has a great product and is winning commercial business.

Farmbot

Remote sensing and communications for farms and the environment.

Agtech is one of the key opportunities for startups in the next decade. Demand for food and efficient production methods will continue to grow. Sensing and communications on the farm is a big problem and these guys have a good solution. Once they are established this will be a solid recurring revenue business.

Ninja Blocks

NinjablocksWhat? Smart home automation hardware devices and Apps to allow home owners to monitor and control security, air-conditioning/heating, lighting and other power related utilities. Home automation and monitoring is another of the top 5 market opportunities for the next decade, due to low costs micro-controllers and components companies such as NinjaBlocks are able to drive prices down to mainstream pricing.

Asset Guru

Provides Asset Tracking for Enterprise & Businesses. This is a big problem, most companies just use a spreadsheet which doesn’t work very well. Recently launched so no customer data yet but they look like they have a credible solution to a real problem with slick customer acquisition. Could develop into a solid recurring revenue business.

PicPac

App for stop motion & time lapse video and photography – Grown from 80,000 to 140,000 users in the last 6 months.

Makeupsocial

Social network for sharing your cosmetics and beauty tips. I know this is not exactly solving a big problem but you cant ignore the fact that they have 80,000 users up from around 10,000 a year ago months ago.

SwarmFarm

Robotic Farm machinery, using GPS and sensing can handle routine farm jobs such as spraying using a robotic lightweight tractor. Based in Queensland and with help from Queensland University of Technology and The University of Sydney Field Robotics team this is a low impact, low cost solution for a farm to cut their labour and fuel costs.

I spoke to the founder about a year ago and instead of spending a year building out a special farm robot, they simply equipped a relatively cheap lightweight farm UTV (pictured below) and spent all their time and effort on the robotic control systems (which is where the problem really is, not with the actual machinery).

Swarmfarm-Agbot - Credit QUT

Swarmfarm-Agbot – Credit QUT

Once they had the robotic control system working in the proof of concept vehicle they have now built a very lightweight sprayer system which is perfect for spraying, cheap to run and low impact on the soil.

Swarmfarm-new

Pitch your Startup, App or Hardware or post a Startup Event or Startup Job


About The Author
Mike88
Mike88
Mike Nicholls Australian Inventor + Entrepreneur working with a small team of engineers building prototypes from Inventions including two medical devices. Publishes Startup88.com and has assessed/reviewed +500 inventions and +200 startups in the last 3 years. Mentors Sydney Startups via Incubate and other incubators and helps members of the Australian Startup Community via the Startup88.com website with free publicity and advertising. Experience in numerous industries including Digital Publishing, Cloud Computing, Apps, Hardware, Aviation, Real Estate & Finance and Health/Medical Devices.
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  1. […] What? Wattcost is a smart power meter that can adapt to existing meters both digital and analogue and provide power monitoring and help reduce power consumption.Why? This industry is ripe for efficiency gains, we have no idea how much power we use until we get the bill. We would however like to reduce our costs and consumption, but its not possible to get this information in real time.Existing smart meter solutions require an electrician to attend the site and remove and replace your meter with a smart meter. The costs can be significant.Some newer homes have smart meters but are primarily for the benefit of the energy company, there is no software or systems to help the user save energy.Wattcost is user installable and works with both digital and analogue meters and is shipping now. Expect either a huge capital injection or a big acquisition offer in 2015.  […]

  2. […] the article 19 Hot Australian Startups to Watch in 2015, the author highlights what can help predict a successful […]