Mercury Rising on Sydney’s Fintech Space


The mercury went up a few notches in the Sydney fintech startup space yesterday, with the announcement of a new fintech targeted incubator hub, Stone & Chalk.  Backed by at least two of Australia’s biggest banks, ANZ and Westpac as well as the NSW Government and other tech supporters, the emergence of Stone & Chalk is another positive sign for the burgeoning fintech industry.  A KPMG report released in late 2014 indicated the potential for global financing activity for fintech related businesses would grow from a modest US$3 billion today to US$6-9 billion by 2018.  So no shortage of opportunity for for digital-native-number-crunchers, savvy investors and co-working spaces with desks to rent.

But Stone & Chalk aren’t the first hub to enter onto the Sydney scene and undoubtedly won’t be the last.  Earlier this year, Tyro Payments, arguably one of Sydney’s biggest early fintech success stories launched their own co-working space on Clarence St, the Tyro FinTechHub.  So one can’t help but wonder – with all this choice, who will win the hearts, minds and bitcoins of the fintech startup community?

Stone & Chalk – The arguments for and against

There’s almost no doubt Stone & Chalk’s impressive array of partners is a knowledge advantage for startups.  With the likes of Veda, Amazon and Intel listed as supporters, founders should hopefully get access to advice from book smart analysts and MBAs.  Pair that up with some serious banking heavyweights (ANZ, Westpac, Macquarie and Suncorp) and on paper it’s a fintech match made in heaven.  Banks and tech players are hungry for innovation, and, facing their own ‘innovators dilemma’, should be more than willing to jump on promising early stage products and internalise them fast, before their competitors do.

But this last point raises an interesting idealogical conundrum for the average fintech startup.  Should they ultimately be successful in developing disruptive fintech products that directly compete or threaten their benefactors market dominance, will it be a case of biting the hand that feeds?

Tyro FinTechHub – The arguments for and against

Tyro is reaching a new stage in it’s fintech maturity journey. Launching Australia’s first cloud based EFTPOS service in 2007, Tyro now turns over $6.5 billion in transactions per year, with rapidly growing, sticky community of 12,000+ merchants.  In a true David meets Goliath story, the majority of those 12,000 merchants transitioned directly away from the major banks, proving it is possible to compete against the banking stalwarts – if you have technology on your side.  And it’s exactly that tenacity, the belief in the impossible and the determination to deliver a different kind of banking, maybe one that Australia isn’t even cognisant of as yet, that the Tyro FinTechHub aims on empowering it’s startup ecosystem to build.  A licence to disrupt. With access to developers, sales teams and marketers who have ‘been there, done that’, it’s certainly a powerful proposition.

But with the stakes raised, the sleeping dogs of industry look like they are slowly waking up to the fintech threat/opportunity on their doorstep.  Can Tyro really offer new startups the deep network connections that the extensive supporter network of Stone and Chalk can?  Startup glamour aside, fintech has traditionally been a deep pocket, deep connection play.


There’s certainly no simple answer and personally, my opinion is that each hub will service a different need and set of future business outcomes.  It’s incredibly positive that big business is funding innovation and it’s great that Tyro is now in a position to support new entrants as well.  Success looks to be on the cards for both incubators and their startup communities. My only hope is that banking and financial products continue to improve.  That small businesses get improved access to more affordable funding and technology forward financial products.  That innovation isn’t stifled by regulation, as Murray recommended in his recent financial systems inquiry.  It’s an exciting space and I can’t wait to see how the next few months unfold.

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