Australia’s Telstra Start-ups Head To China

Posted: December 24, 2014 in Econ 101, Free Trade, Society and Culture

SOURCE:  http://www.theaustralian.com.au/business/telstras-start-ups-head-to-china/story-e6frg8zx-1227163773722

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Telstra’s start-ups head to China

The Australian December 22, 2014

Telsta Entrepeneurs Start Up Office

Muru-D co-founder Annie Parker says there’s phenomenal digital growth in China. Picture: John Feder Source: News Corp Australia

ENTREPRENEURS in Telstra’s start-up accelerator muru-D will visit China early next year as part of a long-term strategy to forge links.

Ten of the 11 start-ups in muru-D’s current intake, including surfboard design company Disrupt Surfing, will be making the trip in March next year.

“There are few accelerator programs that are proactively looking at how we can make the most of the assets we have on our doorstep — the phenomenal digital growth in places like Southeast Asia and China,” says muru-D co-founder Annie Parker.

“We are taking our team to China. Almost all the teams we have we believe we can help crack the China market. And if we can crack China, it’s not a bad market to crack.”

The Chinese visit will be undertaken by the second batch of start-ups taken into the muru-D accelerator program, which began last year and is based in Telstra offices in the inner Sydney suburb of Paddington.

Under the muru-D program, Telstra invests $40,000 in the new ventures in return for a 6 per cent stake. The start ups spend six months working in the offices in Paddington and are provided with business, legal and financial advice to help them grow.

Parker said some of the second batch of start-ups in the program were chosen with a view to their being able to expand into China.

Terry Hilsberg, a start-up mentor and investor who is helping muru-D with its China strategy, says there is a growing start-up community in China with a strong digital focus.

“There are a wave of start-ups coming out of China as the Chinese government is moving the country from a manufacturing economy to a services economy. Part of that is a great emphasis on the internet of things.

“In a city like Beijing there will be 40 start-up incubators like this (muru-D). In any major city in China there is a very significant start-up ecosystem, which is more advanced than Australia.

“What we are doing is exposing our companies to the idea that the Chinese market for digital products is very advanced.” Hilsberg says the Chinese educational sector has a lot of potential. “There is about $300 million per quarter being invested in educational start-ups alone,” he says.

One of the muru-D companies which will make the trip to China has a business focusing on English pronunciation software for children from kindergarten to the age of 12.

“They won’t bother to try to sell it in Australia,” says Hilsberg. “They will go straight to Beijing and the Chinese market.”

“There are some companies in this current batch whose whole market concentration will be on China.”

Some of the start-ups now in the Paddington office are being assisted by Chinese interns living and studying in Australia.

He says muru-D is also keen to reach out to Chinese youth and business groups in Australia and Chinese entrepreneurs based in Australia as potential angel investors in the muru-D start-ups.

He said the 500,000 ethnic Chinese currently living in Australia, including some 90,000 Chinese students, were a rich potential network of business connections in China which muru-D hoped to tap.

“Eighty per cent of Australia’s trade with China is still in iron ore and coal. But if you believe the rhetoric of the free trade agreement, a lot of the other 20 per cent will be building on the 500,000 Chinese living in Australia, including people building start-ups that can go into China,” Hilsberg said. “One of the things we are striving to do at muru-D is to build global companies locally,” says Hong Kong born economist Rachel Bui who is working on the muru-D China strategy.

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