April 13, 2015
Source: The Sydney Morning Herald
Author: James Eyers
New Sydney fintech hub Stone & Chalk has appointed former army captain Alex Scandurra as its chief executive, as the location for start-ups seeking to disrupt banking prepares to open in June.
About 330 entrepreneurs from 120 fintech start-ups have registered to work in the space, ensuring Stone & Chalk will open at full capacity of about 150 people and suggesting it could take up an option to double its area by expanding into a second floor at 45 Clarence Street at the northern end of the Sydney CBD.
Clarence Street is shaping up as the heart of the promising fintech scene in Australia, with payments disrupter Tyro earlier this month opening another fintech hub at 155 Clarence Street, with space for 125 fintech entrepreneurs. While the Tyro hub has been funded by the company and its CEO Jost Stollmann, Stone & Chalk has received seed funding from many of Australia’s largest financial institutions, including five banks: ANZ, HSBC, Macquarie Group, Suncorp, and Westpac.
Mr Scandurra , a former captain in the Australian Army and co-founder of Barclays Bank’s accelerator program, said collaboration between these established players and the companies trying to disrupt them – including P2P lenders, crowdfunders, investment advisers and start-ups working across payments, insurance, capital markets and crypto-currencies – is a fundamental principle of Stone & Chalk.
But he added the mission of Stone & Chalk is to provide opportunity for the start-ups rather than serving desires of the big end of town. As well as the five banks, wealth giant AMP, insurer IAG, global card giant American Express, retailer Woolworths and global technology giants Amazon, Intel, and Oracle are foundation partners of Stone & Chalk.
The corporate partners will not have any rights to the intellectual property created in the hub and none of the foundation partners will be allocated space in the hub on a permanent basis, Mr Scandurra said; it would be for the start-ups to determine with whom they engage.
“It is important to make clear that while we are partnering with large organisations, they do not in any way control what we do with the teams, or how the teams operate, or get guaranteed access to the teams,” he said.
“It is about the start-ups first…[and] looking at what I have seen so far of the applicant pool, we have already got some fantastic teams that are going to disrupt the very partners supporting the space.”
Mr Scandurra, 38, served as a captain and squadron commander in a reserve armoured recognisance unit of the Australian Army, where he spent eight years. An MBA graduate from the London Business School, he has also worked at Lend Lease in a project management role and spent seven years in Nokia’s networks division culminating in running an infrastructure team in the Middle East and Africa.
For the past three years, he ran the Barclays accelerator program in London with well-known global start-up accelerator Techstars, building a network of relationships in London, which is leading the world in development of a thriving fintech industry and which Sydney is striving to emulate. It is estimated that 45,000 people work in fintech in London.
Stone & Chalk chairman Craig Dunn said a deeper and broader “innovation ecosystem” in Australia can be created by the industry and would help in arguing the case for government support. Mr Dunn was a member of the government’s financial system inquiry, which recommended closer collaboration between the financial services industry, government, regulators and start-ups.
He pointed to R&D tax concessions, grants for entrepreneurs and the recent tax changes to employee share schemes as examples of government support for the innovation economy, while noting that Britain had gone much further, including by offering entrepreneurship visas.
“We have the making of a really excellent fintech sector here,” Mr Dunn said.
“People often look to the government for a lot of support, but private enterprise needs to take a lead. When the government sees the private sector committed and putting their own resources in, it will have a lot more confidence that this is worth backing.”
The other foundation partners of Stone & Chalk are data player Veda, Finzsoft (NZ), law firm Allens, adviser KPMG and a number of academic institutions: Capital Markets CRC, the Centre for International Finance and Regulation and Finsia. The hub is also being supported by NSW Trade and Investment through the financial services knowledge hub being run by the Committee for Sydney. Stone & Chalk expects to become self-funded in its second or third year of operation as it charges for memberships, tenancies, events and conferences.
Mr Scandurra said he hoped Stone & Chalk would attract capital from global investors and allow Australian start-ups to expand internationally.
“We want to be a landing pad for international investors and entrepreneurs, by creating a sufficient pool for them to choose Sydney over other cities, but likewise, for our more successful entrepreneurs and investors here in Australia, we want to be a launch pad into other markets.
“That’s a big opportunity play that we have got, and and that is why the [corporate] partnerships are important, as they have operations in the markets we are trying to grow our teams into.”
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