Dimension Data boss turns start-up investor as Rimon Investments hunts new deals

Startup Investors Rimon Investments

This article originally appeared in the  Financial Review.

Chief executive of the Australian arm of global technology services giant Dimension Data Steve Nola will turn his eye towards investment opportunities in the local tech startup scene, joining investment arm of Rimon Advisory as a non-executive board member.

Mr Nola will continue in his role at Dimension Data, but will help Rimon identify new investments, which generally start at the seed round, before progressing to the second stage follow-on rounds.

Rimon Advisory has operated for about five years, helping entrepreneurs plan long-term growth and advising on how to maximise available grants and tax incentives. It opened up a venture capital arm two years ago, enabling it to back some of the companies it was working with and then participate in subsequent rounds.

So far it has publicly disclosed investments in three start-ups; logistics technology provider Premonition, transport and airport connection platform Jayride and online concierge service Amazing Co. However it has also agreed investments in two further start-ups; foreign exchange platform Psyquation and social media intelligence firm PoweredLocal.

Mr Nola said the new role would benefit his existing employers at Dimension Data, giving greater insight into the disruptive small players that could be future partners or competitors to reckon with down the track.

He said he had long harboured a passion for the disruptive innovation happening in the startup scene and felt Rimon had hooked into a good model in mixing an existing advisory firm with investment.

"In my 30 years at Dimension Data I have seen a lot of customers with fantastic ideas that have never been given the opportunity to really flourish and take things to the next step," Mr Nola said.

"I want to impart some of the skills and knowledge I have picked up on to smaller start-up organisations ... If you are going to invest in something early stage you want to be able to give it more than just dollars in terms of capability to go with it."

Rimon Advisory co-founder and managing director Lior Stein said the company's advisory business provided it with an excellent vetting opportunity for potential investments, and that the company was not looking for companies operating in any particular sector. He said the firm looked for the basics of a strong leadership team, a scalable product and a large (preferably global) addressable market.

"We are looking to invest in technology that we think is interesting and that we can have a relationship with the team and have fun in the journey," he said.

"Every team we have invested in, we really enjoy spending time with them."

Mr Stein and Mr Nola both said they believe there are great opportunities for Australian entrepreneurs to think big, while remaining at home, however Mr Stein expressed concern that the prevailing political discourse around innovation had taken a turn for the worse.

He said that while the recent abolition of 457 skilled migration visas and rumoured negative changes to R&D tax incentives were understandable from a political perspective, they sent the wrong message internationally about Australia's standing in the global technology ecosystem.

"I think the government gives mixed messages ... When the Innovation Statement came out it was very positive, but then the R&D tax incentive was reduced, and there has been regular talk about changes that may or may not come, which creates nerves and stress," Mr Stein said.

"The 457 visa changes were not helpful, when you are building a global tech economy and you want to compare yourself to the likes of Silicon Valley and Israel ... they are open to the world.

"There needs to be a better balance between wanting to take care of your own, which is important, and also showing a message to the rest of the world that we are actually a big player."

By Paul Smith