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Private equity to drive Australia’s ‘next tech’
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THE chronic, historical dearth of financial support for ‘next technology’ entrepreneurs in Australia will finally be answered by private equity firms.
That is the view of Dropbox Australia country manager Charlie Wood, who said private equity firms will be pivotal to the survival of Australia’s next generation of technology start-ups – providing funding, business strategy and connections – in his keynote speech at the recent AMMA Private Equity Spring Conference.
AMMA, founded in 2008, is a private equity accounting firm network that is best known for its primary support of disruptive music platform Guvera, raising $90 million in capital for the Australian start-up that is gearing for an IPO this year. 
Mr Wood said Australia had no shortage of entrepreneurs with good ideas, but there was a gap between having a good idea and turning that into a successful company.
“In my experience as someone who has run two different start-ups in the enterprise social media space, I have found that there has been a lack of support available in Australia for entrepreneurs to drive their ideas forward,” Mr Wood said.
“This support would come in the form of introductions to major domestic and international contacts, suggestions for business strategy, funding questions and the ability to help these ideas turn into sustainable companies.
“This space is where local private equity firms can bridge the gap. Instead of entrepreneurs reaching out to Silicon Valley, which is already inundated with people looking for help, they can build a successful start-up with the support of a private equity firm who not only raises capital but also takes a role in driving the company forward.”
AMMA Private Equity sources and manages investment opportunities in the technology and mobile sectors. Its key investments include music stream service Guvera, app development company AMMA Apps Investments, and sports portal Sportkix.
AMMA Private Equity CEO Paul Jansz said Australian technology start-ups, with the right support from private equity firms, had enormous potential to achieve growth, success and returns.
“One of the key issues that entrepreneurs struggle with is understanding where and how to fund their million-dollar idea, and that’s where we come into the picture,” Mr Janz said.
“In return, we are able to access some of the world’s most exciting pre-IPO investment opportunities and offer them to clients of our global accounting firm network. When you think about how technology touches our daily lives, from how we find information to how communicate with each other, you realise how innovative and limitless the tech space is.
“Australia has already proven its ability to contribute to the mobile and technology sectors, and with the right support from private equity firms there’s no doubt our next generation of tech start-ups can bolster our position as a global player.”
Representatives from more than 100 accountancy firms across Australia and Asia attended the annual AMMA Private Equity Spring Conference in early September at Hayman Island, Queensland.
The conference also heard updates on AMMA’s key technology and mobile investments.
Mr Wood said there were key similarities between Dropbox and Guvera that provided a strong foundation for future success.
“Cloud platforms like Dropbox and Guvera have the ability to understand how their customers use their services,” Mr Wood said. “This facilitates real time feedback into how the offerings should evolve and how to better serve customers, both existing and new. This is an incredibly powerful part of the growth strategy of a SaaS platform.
“Both technology platforms have also been effective in developing key channels and partners that have helped to drive scalable distribution. For example, Xero’s partnership with Dropbox and Lenovo and Brightstar’s partnership with Guvera.
“At the end of the day, apart from funding and business strategy, a successful start-up needs to have scarcity and scale. Every product needs a point of differentiation and the ability to drive significant user numbers.”
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