Will the Victorian government’s $20 million e-commerce grants scheme give local startups a boost? Probably not

The Victorian government’s $3 billion support package for small and medium-sized businesses, unveiled on Sunday, offers a swathe of funding designed to help businesses keep their heads above water and adapt to Premier Daniel Andrews’ new “COVID Normal”.

Part of the plan is committing $44 million to “equip businesses with the support they need to thrive under a COVID Normal”, the statement on the support package said.

“Even after we reach COVID Normal, many businesses will be required to change the way they do things, so we can keep cases low and protect our hard-won gains,” it added.

That support includes $20 million in funding for small businesses to access “off-the-shelf digital programs” to help them make the shift and adapt to online operations.

At this stage, it’s not clear exactly what kinds of businesses will be eligible to access this funding, or how the scheme will work.

But, the release specifies Shopify and Square Online as examples. So, could some of this cash ultimately filter through to the startup and technology sector?

Speaking with SmartCompany, Michael Tutek, co-founder and chief of e-commerce startup Preezie, says “probably not”.

Again, the details are scarce on this, and it’s not clear exactly how the funding is going to be dished out.

But Tutek anticipates it will be focused on helping businesses that have traditionally been in-store in creating and optimising their online presence.

“The reality is those businesses are typically going to go to a Shopify, or a digital agency that can just pop a store up real quick.”

The businesses that access this funding may not necessarily be prioritising spending it on local tech offerings. Rather, they’ll be looking to get their online presence up and running, and up to scratch, as quickly and as easily as possible.

“I can’t actually see or envisage how a lot of that comes back to startups specifically,” Tutek says.

“If my business is struggling to keep afloat, I’m struggling to feed my kids, I’m not sure if I’m going to have to sell my house … if you get a grant that can help you sell your coffee online or your beer online, the last thing you’re probably looking for is a startup to help.”

It’s not to say business owners will be actively avoiding startups, but they can be forgiven for not actively seeking them out either.

“They’re going to want just the quickest, easiest fastest solution.”

At the same time, this isn’t something Tutek is particularly concerned about. If a business is just setting up its online presence now, it’s probably a little early to be implementing Preezie anyway.

The startup is designed to bring an in-store experience into online stores, allowing shoppers to specify their preferences and price points, and suggesting items that fit the bill.

“People come to us when they’re focusing on customer experience and focusing on getting higher conversions,” Tutek explains.

“You need some traffic, you need some sales, you need an e-commerce solution,” he adds.

He sees the $20 million in funding going towards bigger, more recognisable businesses — “probably the Shopify, the BigCommerce, the Netos of the world” — as well as to digital agencies who can make the whole process seamless.

“But I think that’s a fair call,” he says.

“If I was them, I would just be talking to Shopify or the e-commerce agency directly, who can implement my online store in two weeks … happy days,” he adds.

“Yes, a very small percentage of it would trickle down to us, but the reality is not much.”

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