The startup ecosystem in Australia has rapidly evolved over the past few years and due to the impact of COVID-19, it will certainly be very different in the near future. On the 12th of August 2020, with over 80 virtual attendees, Hatch Quarter hosted the third HQ Boardroom Discussion on the Future Innovation of Australia with Robert Williams (Director at Artesian) with valuable information about the COVID-19 impact and how to overcome this with the current support available for startups.
As a Director at Artesian, Robert is responsible for leading Artesian's agrifood venture capital (VC) investment activities and has established himself as an experienced investment executive with a track record in the global institutional, high net worth and retail investor communities. With Artesian being at the forefront of investing in innovation in Australia, Robert is uniquely positioned to provide entrepreneurs and investors with a breakdown of the current tech landscape, and valuable advice on the funding process based on his experience. Here is the first part of the key takeaways from the webinar.
The Current State of Innovation with the Impact of COVID-19
► The current COVID-19 situation brings major disruptions to the global economy in which global financial volatility and flow of capital have been impacted. Due to the constraints in movement and isolation, internet of things (IoT) and 5G capability are important drivers of change in consumer preference and consumption patterns.
► In terms of the number of deals, only 50 deals were closed in the first quarter of 2020, compared to 90 in the same quarter last year. Investors are also reducing funds allocated by 10 to 75 percent, and some anticipate that the impact of COVID-19 will last between 6 months to 2 years (source1, source2).
► In terms of specific opportunities in innovations, the Australian Agri-Food industry is likely to incorporate IoT into the process of labour management where the labour movement is restricted and ensure food safety, traceability and food quality at the same time.
► The startup and technology world is always in a constant state of change, and with the current situation, the state of change is amplified. VC's are also required to be flexible and adaptable to the transformation of the environment. In responding to this accelerated wave of change, on the startups’ side, VC's are increasingly analysing different startups at a more detailed level to identify the opportunities.
Best Mindset for Startups
► Given this current climate, it is a must for startups to adapt and evolve. Startups are recommended to address the COVID-19 environment to recognise and pivot new opportunities to target new markets that may be emerging. In addition, existing products and models should be reassessed for their applicability in the current environment.
► Potential funding rounds are going to be smaller with stricter criteria due to the economic uncertainty. This is likely to make sourcing capital more challenging and would require startups to be leaner to survive longer.
► According to Robert, the most impressive innovators are resilient and dedicated to assessing what is happening around them and understanding the business areas that need to evolve.
► For first-time founders emerging in this time of rapid change, it is advised to embark their journey with ‘eyes wide open’, and explore market intention and evolving customer preference. It is also critical to understand the capital funding process and the preference of the investors.
There has been a significant shift in the climate, however, the impact of the lockdown has accelerated the growth of digital solutions in the innovation areas. As millions of people are forced to stay home, corporations and startups are forced to deliver and develop digital solutions to sustain their operation flow. Moreover, investors and VC’s are still actively looking for opportunities and providing assistance to innovators.
This is the first part of the HQ Boardroom Discussion with Artesian: The Future Innovation in Australia Blog. Read Part 2 here.
Contributors: Andrea Flair Nathan and Lucy Kim