From a standing start a decade ago, Australia’s Startup landscape has grown exponentially over the last few years; there are more resources devoted to helping new Startups get off the ground than ever before, with coworking spaces, incubators, and accelerators aplenty, targeting every niche imaginable.
On the surface, it may seem like all these efforts are devoted to early stage businesses, but as more of the pioneering Startups in the ecosystem mature into Scaleups, the number of initiatives out there to support them is also growing.
So what exactly is a Scaleup? For Trent Bagnall, co-founder of Slingshot Accelerator, Scaleups are simply mature Startups.
“They already have revenue, customers, a product that has product/market fit, and they generally have experienced growth of 30 percent year on year; those are the minimum requirements,” he explained.
Designed to support these businesses is the AVRO Scaleup program, run by Slingshot Accelerator in conjunction with corporate partner Qantas.
Qantas is running both a Startup and a Scaleup program through AVRO to address strategic opportunities it has identified for collaboration with innovative businesses. These opportunities have been grouped according to five key themes: creating seamless journeys; care beyond the air; building connected platforms; transforming for tomorrow; and innovating without limits.
The Scaleup program in particular has been designed to connect corporates with a new solution that is close to ready-made to help them fix a problem within their business, or allow them to tap into new markets quickly.
Bagnall explained that through the AVRO program, Qantas is looking for businesses that “may still be in Startup-land”, but need an incentivised partner like Qantas with a large customer base to help them scale quickly.
The Scaleup program was developed after Slingshot Accelerator found that, while its Startup program does well to connect corporates with innovative products and services that might add value to their business at some point in the future, limiting applications to exclude more mature Startups also meant excluding Startups with significant potential that a corporate could work with immediately to reach a deal.
Though they may have some fine-tuning to do, Bagnall explained, a Scaleup with revenue and product/market fit is generally less in need of the services offered by an accelerator, such as advice around business modelling, branding, and pitch preparation, and more in need of a partnership deal with a corporate.
Bagnall explained, “While the Startups are still getting their MVPs done and getting product/market fit, the corporate can already start working with a group of Scaleups that are ready to go.”
Though a Startup probably adds a more “disruptive type” of innovation to a corporate’s business than a mature Scaleup, Bagnall admitted, they are also high risk; a Scaleup with product/market fit means a higher probability of making a deal.
With this in mind, the AVRO Scaleup program looks to help with the core problem facing Scaleups: the process of scaling. The goal of AVRO is to help the Scaleup and the corporate sign a Memorandum of Understanding (MoU) by the time the program wraps up.
“As Startups know, trying to deal with a large corporate can be time wasting and messy – it can be lots of maybes,” Bagnall explained.
“There’s this analogy about lots of cups of coffee; often the Startup will reach out to the corporate to say, ‘I think we’ve got a great product’, so they meet in a coffee shop and do a little demo, the corporate gets really excited, the Startup goes back and says, ‘we’re going to sign a great deal with this large corporate’, and it turns into six to 12 months of maybes and often just fades away.”
Slingshot Accelerator calls its Scaleup program a ‘Quick to No’ program, with the goal to help get Qantas and the Scaleup to an MoU in five meetings or less. The form that MoU takes can vary, whether it be a white label distribution agreement to Qantas’s existing customers or bringing the Scaleup on as a vendor to use its technology internally.
To help both the Scaleup and the corporate get ready for this process, Slingshot Accelerator acts as a facilitator and does the heavy lifting. As Bagnall puts it, Slingshot Accelerator’s skillset lies in bringing the two different forces together.
“There’s a different language and culture on both sides,” he said.
Slingshot Accelerator will work with the Scaleup to ensure they have a solid value proposition for Qantas, then work with the internal business units at Qantas to ensure there is a fit and a demand for the Scaleup’s offering, adequate resourcing, and KPIs associated with its onboarding.
With Slingshot Accelerator and Qantas aware that Scaleups are well and truly busy running their businesses, they are able to take part in the program remotely. This participation may be different from Scaleup to Scaleup, depending on the stage of their business and what they need.
“There might be a couple of face to face meetings in Sydney, but there’s no requirement to be full time or part time, so it really opens the program up to Startups and Scaleups across the country and internationally. It’s a lower touch process, and we’re really trying to get outcomes with the least amount of time input as possible,” Bagnall said.
Previous iterations of the Scaleup program have seen success, with healthtech Scaleup Curo Technologies a key example. Coming through the HCF Catalyst program, Slingshot Accelerator helped the Scaleup and HCF develop a commercial agreement that has seen the two work closely together over the last year, with HCF also later investing $1 million into the business.
Of course, just because a Scaleup may have product/market fit, customers, and revenue doesn’t mean they might not need extra assistance; those in need of a helping hand will also have access to the Avro Startup program, enabling them to tap into the wealth of skills and expertise in the mentor network.
They will also have access to the full range of perks being given to participants, including $5,000 in flights redeemable from Qantas and Jetstar.
Bagnall said, “It’s all about getting a real outcome at the end of the process.”