Access to Asian investors for Australian start-ups set to be boosted

Moves to free up investment flows between Australia and its Asian neighbours have been welcomed as an opportunity to attract overseas investors to Australian start-ups.

Newly sworn-in Treasurer Joe Hockey is expected to sign statements of intent for improved financial access with Singapore and South Korea this week as part of the Asian Region Funds Passport scheme, which is designed to simplify investment relationships and boost investment flow from Asia.

The Australian reports South Korea and Singapore are ready to sign, and there is speculation Japan and Taiwan may follow suit.

Dilip Rao, president of the TiE network which runs a Go Asia program to encourage Australian start-ups to focus on Asian markets, told StartupSmart this was a fantastic development for start-ups.

“This is targeted and the connections will start at the big end of town, with infrastructure and private equity. But it opens up the visibility of Australia as a market to all of those countries,” Rao says. “The connections and investment will trickle down as the people who run big companies are connected to start-up ecosystem as investors or mentors.”

Rao says a significant benefit of this step will be increased visibility for Australian companies and start-ups.

“The visibility and direct connections at the private equity or angel end is what opens up the market for Australian entrepreneurs, both to enter new markets and a source of funding, will be fantastic,” Rao says.

He adds Australian start-ups were increasingly comfortable pursuing opportunities in Asia and should increasingly look to regional neighbours than the United States.

“As entrepreneurs locally build connections to Asia, such as India, China and South-East Asia, we see a lot more comfort working with Asian countries. Frankly a year ago, no one would talk about Asia so it’s changing,” Rao says. “We see more of America and its culture in everything and all the success stories we hear about are in America. We forget about these huge Asian markets next door.”

Several start-ups were recently encouraged to pursue Asian markets at a pitching competition held by the Sydney chapter of TiE, an international not-for-profit entrepreneurial network.

“There has been a lot of interest from the Asian chapters, and while these entrepreneurs need to make the commitment to make the trips, they’ll have a warm reception,” Rao says.

TiE is running another start-up pitching competition at its national conference in October.