Sydney-based venture capital fund Tank Stream Ventures has today announced that it has closed $20 million and is looking to invest in early-stage startups with global objectives. The venture fund promises to open up pathways into China for startups interested in that market.
Tank Stream Ventures was founded by BRW rich lister Markus Kahlbetzer with Airtasker’s Tim Fung and Jonathan Lui and former Renault F1 engineer Rui Rodrigues who manages the fund’s investments. Rodrigues said he is scouring the country for potential new investments – namely, early-stage tech startups with proven traction, product-market fit, revenue potential and ambitions to go global. Tank Stream Ventures is particularly interested, though not exclusively, in FinTech and blockchain companies.
Tank Stream Ventures promises to bridge the gap between Australia and China, with one of its investors based in mainland China. This connection has boosted the fund’s technology and finance networks in China.
Rodrigues believes startups can only tap into opportunities in China if they have a local network, knowledge and presence. This is because the Chinese market (and Asian markets more broadly) is moving very fast and is far more complex than Australia and its Western counterparts.
In a previous interview with Startup Daily, 2and2’s Managing Director Leon Young said Australian companies looking to break into the Chinese market – or at least, their senior teams – need to have an innate understanding of the Chinese mindset. Success in that market is unlikely, if not impossible, otherwise.
“The reason they’ll buy a product is likely to be quite different to a Western audience and if you don’t understand the differences, you’ll have an uphill battle,” Young said last year. “I have learned that the only way to truly get into the mindset is spend time on the ground immersing yourself. The research you do on the internet never quite matches what you experience in a foreign market by just being there.”
Mark Stanley, Founder of Literatu, an EduTech startup that’s experienced rapid growth in Asia, communicated a similar sentiment, saying there is great opportunity for Australian companies to engage Asia, “as long as they engage with Asia in the way Asia does business – i.e. in person.”
“We have found that relationships are paramount to success in Asia … To sell access to technology in the North American style of ‘direct via a great website’ – is totally hit and miss. This means an investment in time, patience and money. You are so much better off having a hawker style meal with your partners streetside than spend money on the most amazing website.”.
In the past year, we’ve seen Australian companies show increasing interest in China. Telstra-backed accelerator muru-D’s second class was able to recognise and pursue vast opportunities in China after a program-led excursion to the country.
Tank Stream Ventures’ connection with China, however, doesn’t come as a surprise. Just last week, Airtasker announced the closing of a AU$6.5 million funding round led by Shanghai-based Morning Crest Capital, as well as Australia-based NRMA, Exto Partners, Carthona Capital and Black Sheep Capital.
Morning Crest Capital’s portfolio demonstrates the firm’s interest in the Australian market. Not only is Morning Crest Capital an investor in Tank Stream Ventures, but also Pocketbook, GoCatch and SchoolPlaces, all of which have been invested in by Tank Stream Ventures. In fact, Morning Crest Capital is setting itself up as a bridging venture capital firm, giving international companies access to both Chinese funding and markets.
In addition to the aforementioned startups, Tank Stream Ventures has also invested in bug tracking and client feedback tool BugHerd, Q&A based social network Spring.me and most recently, equity crowdfunding platform Equitise.
Tank Stream Ventures is also affiliated with Sydney-based coworking space Tank Stream Labs, which is home to 30 startups and over 150 technology entrepreneurs.
Startups looking for investment or opportunities in the Chinese market can pitch to be part of Tank Stream Ventures’ portfolio via www.tankstream.vc.