Most of the fintech start-ups are lean operations, having relatively small numbers of staff, but a big vision. The research has underlined the importance of strong support networks beyond the founder, the board (if there is one) and investors. The ability to effectively leverage peer and industry support is imperative.
In the Census, the use of accelerators/incubators and co-working spaces was explored with Australian fintechs. A number of points can be made about their usage and impact.
The power of hubs... Accelerators and incubators are considered an important contributor to the success of the fintech industry in Australia by 60% of Census participants. In comparison, last year the importance was higher (69%) indicating that whilst hubs are critical for support, the industry is coming out of the nursery stage. Those in hubs experience the benefits almost daily with planned and unplanned conversations helping them take constructive steps in the right direction.
Mixed usage of co-working space... Users of hubs describe the workplaces as a source of ideas, experience, insights, expertise, accommodation and support. However, they haven't cut through to all. Just over half of fintech start-ups surveyed (55%) have ‘never used a shared workspace’. Some of those that embarked on their start-up journey without the support of a hub, lamented not having found one from which to launch their venture.
Lower cap firms more reliant... Typical usage of co-working spaces is more limited among fintechs that have raised in excess of $5m of capital to date or are greater than five years old. These businesses have evolved toward renting their own office space and have surpassed their initial requirements for co-working spaces.
High usage amongst the converted... Hubs are accessed on average over two times a week, with three in ten fintechs accessing these between five and seven times a week. Frequency of usage of co-working spaces is higher among fintechs based in NSW which reflects that NSW is the key financial market in Australia, housing the greatest number of fintech hubs/co-working spaces.
Government support is growing... In the past 12 months there has been significant activity by State governments to create new and expanded hubs which will accommodate fintech start-ups. This is demonstrated by the Sydney Start-up Hub which when open in late 2017 will accommodate some 2,500 people across a range of incubators and accelerators over 11 floors. In Victoria, the State Government released a tender in June 2017 for a fintech operator to launch a dedicated fintech hub / accelerator in the Docklands digital precinct.
FinTech Australia membership
Number of employees
Use of co-working space
Q4. How many days a week do you typically use a co-working space?
Base: All respondents (n=)
Accelerators / Incubators are an important contributor to the success of the fintech industry in Australia
Q27. To what extent do you agree or disagree with the following statement? - Accelerators / Incubators are an important contributor to the success of the Fintech industry in Australia