SouthStart pulls the plug on Adelaide conference, incubator and co-working space over lack of funding

The organisers of Adelaide-based startup conference SouthStart have announced they are cancelling the annual event and closing SouthStart’s co-working space and incubator program, calling out the state government for its “rhetoric” around startups, which they say is at odds with a lack of support and funding for such initiatives.

The SouthStart conference has seen the likes of Vinomofo’s Andre Eikmeier and venture capitalist Samantha Wong take the stage over its four years of running, and has welcomed more than 3000 attendees and 150 plus exhibitors in that time. This year’s conference was held in July.

The South Australian government had previously provided $400,000 in funding over four years to support the SouthStart conference but this funding has now “dried up”, according to SouthStart co-director Steve Barrett.

“This funding has dried up — we put in an application for further funding, but we aren’t funding just for SouthStart as a conference but as a series of initiatives, including physical space” Barrett tells StartupSmart. 

SouthStart’s co-working space, which was known as Marjoran Distillery when it opened in 2012 and moved locations in 2014, will also now ” become defunct”, along with the SouthStart incubator program, when the organisation “decide[s] to close the doors in a month’s time,” according to Barrett.

“We are no longer promoting SouthStart initiatives because the funding isn’t there,” he says.

“At this point in time we are not able to open doors in most directions we turn.”

SouthStart’s co-working space is a not-for-profit organisation funded through memberships, and according to the The Advertiser, it was the first private co-working space to be established in the city.

At its peak three years ago, it had 60 members but that number has fallen to 10-12 members today. Barrett says this is largely because of the dispersed, crowded nature of co-working spaces in Adelaide.

“Adelaide went from one co-working space [Majoran] plus a public library to 25 in the space of two or three years,” he says. 

Manufacturing and Innovation Minister Kyam Maher said in a statement to StartupSmart that while South Australia “has a strong focus on growing our innovation ecosystem and we have ongoing programs to invest in startups”, there are “no plans to provide SouthStart with funding to cover their co-working space’s rent or renovations.”

“As with all businesses, the challenge remains for these co-working spaces to provide competitive value and differentiate their product,” Minister Maher said.

“South Australia has a thriving innovation ecosystem, with a significantly larger number of programs and co-working spaces than when SouthStart opened in 2012, including global programs such as Techstars and MassChallenge.”

Barrett believes it is because Adelaide has such a large number of startup programs, initiatives and co-working spaces that there is a need for a central, well-resourced startup precinct, spearheaded by SouthStart.

“That’s the problem: there is no beacon, no lighthouse here that is attracting venture capital firms and tech companies,” he says.

The SouthStart team tried to establish this centralised innovation hub, to “take the lead” and bring the startup ecosystem under the one roof, Barrett says. After putting out a petition for an Adelaide startup precinct, which amassed 150 signatures from well-known venture capitalists and entrepreneurs, the team encountered difficulty in securing funding for the project from the state government.

Barrett says the South Australian government was “looking at putting out a tender” for parties interested in opening up an Adelaide startup hub, however his expectation was that “it wouldn’t happen very soon”.

“The support just doesn’t seem to be there, and the conversations have been dragging a bit too long,” he says.

“Adelaide has always been fantastic in terms of the government coming forward and supporting initiatives. We are wondering why the rhetoric and why the slow down of funding,” Barrett says. 

For now, Barrett will be focusing on his role as chief executive at Adelaide tech startup Teamgo, but says SouthStart would be “more than willing” to work with interested parties looking to run the festival in the future, “even on a [name] licensing basis.”

“We would like to see something happen in South Australia, if not us then someone else,” he says.

“Hopefully in a few years time someone will come along and pick up the slack.”

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