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A chat with Jackie Vullinghs, Principal at Sydney based AirTree Ventures
Australian tech scene, American culture of possibility, Twitter hype, global fintech & more
Sar : You worked on the trading floor at big banks for 6 years in London before moving to a startup focused on software for companies for handling the administrative work of hiring and managing freelancers. Was it a big culture shock? The mindset required to excel in those worlds are very different. What were the first few months like?
Jackie : The biggest culture shock was the hours - on the trading floor I was used to waking up at 5.30am, being at the desk by 6.30am. At Kalo in London everyone arrived at 10am so I could wake up at a sensible time and exercise before work, it felt like such a luxury.
I also had to learn to work in a team for the first time — I was running my own business on the trading floor and it was very self-directed, as long as you’re making more money every year and not breaking any rules you’re left to yourself. I had to learn how to work closely with others to manage longer term projects with competing priorities and multiple dependencies.
The best part was the motivation shift. I came from an industry in structural decline to one where the world was filled with opportunity. That energy is addictive and it’s the reason I’ll stay in tech for the rest of my career.
Sar : You later moved to Australia and have been an investor at Sydney-based AirTree Ventures. What debates or narratives on US tech twitter chatter don’t resonate with you?
Jackie : It’s hard to generalise, but US tech twitter feels much more hype-driven — some trend or company is the future of technology for a minute, then a few months later it’s completely forgotten. Everything from 👁️👄👁️ to whether or not DTC e-commerce is a venture-scale business model. I even had to block “remote work” on Twitter in March.
It’s also surprising how little US tech twitter talks about the rest of the world. It’s almost as if the only history is US history, the only politics is US domestic politics (or other countries’ trading relationships with the US) and the only tech companies that really get attention (until they’re huge) are US companies.
Sar : It’s hard not to agree with you on tech twitter being hype driven. It’s a lot of memes. Once an idea gets traction amongst a small circle of insiders online or offline, you start seeing lots of people tweet about it. It’s sort of a race to the bottom where you don’t want to not be associated with what’s hot!
On the flip side, what are some things in the American tech culture that deeply resonate with you? I believe diversity in venture capital is just as big an issue there as well.
Jackie : I love the culture of possibility — if you can dream it you can create it, and no ambition is too great. That is uniquely American and in my opinion is still why the US private sector leads the world in technological innovation (for now).
I also love the culture of sharing and building upon each other’s ideas, I’ve learned so much from the US tech and finance communities on Twitter.
On your point about diversity - it’s a problem everywhere in the world, but it seems like the industry is shifting quicker in Australia than in the US. At AirTree, we have 40% women on the investment team and ⅓ “non-Western” ethnic background and you can feel the sense of obligation all the VC funds have locally to open up opportunities to under-represented groups. We’re also hearing more founders express their desire for diversity on their board.
Sar : What made you caveat what makes the US lead in innovation with “for now”?
Jackie : The Chinese government dictates the allocation of resources across the public and private sector, and it’s clear that leadership is prioritising R&D investment in areas like artificial intelligence and renewable energy, so it’ll be interesting to see how those infrastructure and deep tech investments impact development at the services layer over the next 5-10 years.
The consumer apps I’m following increasingly come from Asia as well — from Pinduoduo to TikTok and Tencent’s gaming empire.
Sar : When people in the States think about Australian tech scene, we largely associate it with Atlassian and Canva (Afterpay is top of mind for the fintech people). Both of them are very successful, get press coverage here, play into the thematic memes of their categories and have had cap tables filled with high profile SV based venture firms. Why do we not hear about Australian companies a lot more in the zeitgeist here? Are there some structural or cultural reasons? I know a lot of SV players are now investing globally and many are building relationships in Sydney and Melbourne. But, the Australian startup stories don’t seem to breakthrough here the way Indian and Chinese startups stories do!
Jackie : We all live in filter bubbles and only hear about startups if the people we follow online or the media write about it. You will only hear about early stage companies in another region if you follow people in the region who would talk about them online, while the media will usually only write about the startups that raise large rounds, have high profile SV funds investing, or have become the category leader in their space. Which is why that’s been limited for Australia — there simply haven’t been that many $50m+ revenue companies yet. That’s changing quickly though, keep your eye on companies like A Cloud Guru, Linktree, AirWallex, Culture Amp, Go1 and Secure Code Warrior.
Sar : I saw an amazing Australian edtech startup called Forage raise Series A from SV based Lightspeed Ventures the other day. Can you give us an overview of the venture ecosystem in the Australian tech hubs? There’s always a subtle rivalry between ecosystems where the outside investors start crowding out the local investors using their brands. We see this dynamic domestically in the States where SV giants start picking up a lot of hot deals in LA, NYC and all over the country. Do you see this play out between cities domestically and nationally (with SV capital flowing in)? A deficit of capital and risk-taking in certain sectors or stages in a city often exasperates this.
Jackie : There are three larger VC funds in ANZ — AirTree, Blackbird and Square Peg — then a range of smaller funds. We don’t yet have the hyper-competitiveness of the US, but we’re starting to see SV giants invest at seed stage in ANZ (Bessemer investing US$1.2m in Portainer, Accel investing US$2.2m in Pyn), which is putting the right pressure on us to have conviction and invest early.
We don’t usually see those larger US VCs as competition though. We often co-invest, which gives founders the combination of local help using our networks in ANZ for hiring, BD, founder intros and someone at the end of the phone in their timezone, while also getting help from experienced US VCs as they expand into the US.
Sar : I enjoyed your deep dives on companies like Square and Spotify. I'm sure you are aware of the brewing world of business analysis in Substack newsletters on American tech twitter. There has been an explosion lately! Do you see this phenomenon in your world too? Is there a strong appetite for this type of content in the Australian tech scene? What drives you to do such deep dives?
Jackie : I started writing to help me think more clearly and mostly did deep dives into different sectors initially (fintech, health, consumer brands etc). About six months ago I decided I wanted to start investing in listed tech stocks again and thought that if I was going to do all the research on whether to invest I may as well write an investment paper at the end to save others doing the work. The deep dives I publish publicly are very similar to the investment theses we write internally for potential startup investments, but by making them public I can get feedback on my thinking from the whole world vs just my team at AirTree, which is fun.
In terms of Aussie appetite for content - I think people working in tech all over the world have a similar culture of curiosity and ambition, reading and learning as much as they can from anyone who can share lessons learned. Most of the best content to date is from the US and so inevitably has a US lens on the business model, so hopefully I can provide some Aussie flavour where it’s useful, which is mostly in regulation-heavy industries like finance and healthcare.
Sar : As a fellow fintech geek, I liked your blog post about fintech opportunities in Australia. You break down the product categories and list out both local and overseas startups. Are there any quirks in product development, business models, target audiences or growth models in the hot categories of fintech that you think would be foreign to people outside of Australia?
Jackie : The US is such a unique beast in fintech — getting started is hard because of the regulatory complexity, but the existing system is so much more broken than in most other parts of the world and the margins are so much greater than in Europe or ANZ. As an example, in the UK and in Australia you rarely pay a bank fee, can sign up for an account online, and can transfer money instantly between banks for free. This makes it much harder for neobanks to compete with the established banks. Interchange is also significantly higher in the US which means companies like Chime and Divvy can succeed by only monetising through interchange, which isn’t possible in Australia and means that our fintechs need to get into subscriptions or lending much quicker to get to sustainable unit economics. We’re just at the start of that journey in Aus, but in the UK Revolut already has several subscription tiers, while Monzo recently launched lending for its Personal account and subscriptions for Business.
Sar : What are your content recommendations for people who want to get more educated on the early stage startup scene, emerging trends and mature tech companies in Australia?
Jackie : The technology section of the Australian Financial Review and Sydney Morning Herald usually cover the bigger funding announcements as well as the news on the more established Aussie tech companies. We also have smaller startup-focused websites like Smart Company and Startup Daily. And sign up to my Substack :)
Sar : As a consumer, what products would you recommend us to check out? I would imagine there are some product experiences or design paradigms that are somewhat foreign to people who exclusively use apps and websites built in their home countries.
Jackie : It could be difficult to get access from abroad, but Up Bank is the best neobank UX I’ve seen globally, incorporating delight and games at every opportunity within the product. I’m also obsessed with our portfolio company Linktree’s design ethos and UX at the moment — they’re relentlessly focused on simplicity, revealing the depth of functionality and integrations only at the moment the user needs it, which leads to some truly magical moments when you reveal a YouTube or Twitch stream, and will extend so much further in the future.
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