Sydney Startup Hub shuts down right now, after seven years, due to the NSW authorities.
And proper now it’s clear that on the subject of startups, the federal government couldn’t organise a piss-up in a brewery, to make use of one of many extra well mannered variations of the idiom.
One other manner of explaining it’s that they’ve bombed the Sydney Startup Hub to “put it aside”.
When NSW science, innovation and expertise minister Anoulack Chanthivong revealed the transfer in December 2024 he had no particulars past ‘someplace in Tech Central’.
Eight months on, the Startup Hub’s future continues to be unclear.
The minister, who appears busier than a Round Quay busker, can also be accountable for the higher regulation, truthful buying and selling, business, commerce, constructing and corrections portfolios.
Minister Anoulack Chanthivong on the NSW Funds Estimates committee listening to this week. Screenshot
So you could possibly forgive him if startups aren’t on the high of his precedence listing. The sector extra broadly, and this author, have picked up that vibe since Labor got here to energy in 2023 and kicked off by cutting funding to the Sydney Startup Hub.
The Hub has been residence to Stone & Chalk, Tank Stream Labs, Fishburners, Antler, the incapacity accelerator Outstanding and Microsoft Reactor, and others, in addition to the Regional Touchdown Pad and Worldwide Pad, with room for 1800 folks and round 500 startups. Shared desks began at round $100 every week.
Its significance to the sector must be remembered in Tim Fung, chair and CEO of ASX-listed Airtasker turning up to help build the Tank Stream Labs site there.
Since Chanthivong introduced the transfer, the brand new location felt like a state secret for many of 2025.
However we now know, due to the Investment NSW website that it’s the Sydney Scaleup Hub at 477 Pitt St, Sydney, 2km down the street, which is being rebranded as Tech Central Innovation Hub.
Deal not carried out
The one factor is, simply days earlier than the closure, Funding NSW had not but finalised a deal for a possible operator, as InnovationAus reported on Wednesday. And who’s going there’s additionally up within the air.
And the one tenant, aside from Stone & Chalk, which operates the Scaleup Hub on behalf of the federal government, hoping to relocate there from the prevailing website, is Fishburners, which even because the doorways are supposed to shut, awaiting a inexperienced gentle for its transfer, is staying put till a minimum of mid-September.
Within the meantime, the opposite tenants have scattered to the winds, ending the collaboration that embodied the Startup Hub because it opened in 2018.
Coworking area Tank Stream Labs and accelerator and investor Antler received’t be a part of the brand new website and made various preparations. The Microsoft Reactor has gone.
Stone & Chalk, which operates in Sydney, Melbourne and Adelaide, bailed from York Avenue early, and has been a vocal supporter of Tech Central, with a vigorous social media advertising marketing campaign backing the idea.
However it’s value remembering that they misplaced $6.95 million within the 12 months to June 2023, on high of a $1.5 million loss within the earlier yr.
Stone & Chalk CEO Chris Kirk
CEO Chris Kirk spent appreciable time righting the ship, telling Startup Day by day in March 2024 that mentioned: “Over the previous six months, we’ve carried out a complete motion plan to fortify our monetary place and safe long-term sustainability. We now have efficiently labored with our companions to safe extra funding, and on the similar time, seen important development in our nationwide startup and scaleup group.”
Stone & Chalk’s consolidation from previous website is smart in that gentle, particularly given the repeated assertion that York Avenue was “not commercially viable”.
The Covid pandemic remodeled how folks work and whereas the federal government subsidised the Startup Hub website, it’s clear that Stone & Chalk, in addition to Tank Stream Labs and Fishburners struggled underneath a brand new monetary dynamic.
However the query stays within the context of early-stage startups: what does business viability appear like and what’s the easiest way to help corporations with little money and infrequently pre-revenue if you would like them to come back to the town? In any case, premier Chris Minns is the one who known as for staff to get again to their CBD places of work to help the financial system.
An absence of desks
There was additionally a telling second in the course of the NSW Funds Estimates committee hearings on Monday, when the Funding NSW management was requested in regards to the change and the maths didn’t add up.
Liberal MLC Jacqui Munro, the shadow assistant minister for innovation, mentioned her understanding was that “Wynyard had about 600 desks obtainable, and now there is likely to be 250 desks obtainable”.
Funding NSW head of innovation and entrepreneurship Liza Noonan mentioned that speaking to the tenants, they’d “been working at one thing like 50% occupancy on the startup hub”, whereas three-and-a-half flooring have been vacant for a while – “we misplaced anchor tenants in company phrases like Optus and Caltex years in the past,” she mentioned – and “the product that the Sydney Startup Hub is providing was not aggressive” amid “a really aggressive co-working market within the Sydney CBD”.
The Tech Central Scaleup Hub at 477 Pitt Avenue, designed for extra mature corporations, presents suites and different amenities for 60 scaleups, in addition to shared workplace area throughout two flooring, with round 150 desks. It was developed by the previous Coalition authorities.
Noonan mentioned there’s a minimum of 100 extra desks obtainable on the Pitt St website for the transfer.
I’m not Sir Isaac Newton, however could I counsel that if “round half” of 600 desks had been getting used, and the brand new provide is “a minimum of” 100, and apparently 60 startups have already put their hand up for area, even for those who assume the 150 scaleup hub desks are additionally obtainable, you’re nonetheless providing much less area than the Startup Hub’s present utilization ranges.
As a result of the price of a desk can’t be disclosed, one thing that puzzled Munro in a chicken-before-the-egg manner, it’s laborious to determine whether or not it’s a problem in comparison with the previous website. Are founders being priced out of Sydney? We don’t know.
Noonan advised Funds Estimates “we do imagine there’s emptiness. I’d should tackle discover the precise quantity of emptiness throughout the Stone and Chalk flooring”.
Antler started life on the Sydney Startup Hub in 2019. It’s moved elsewhere with the shutdown
Greater than 1,800 startups have been residents on the 11-floor constructing above Wynyard practice station. Collectively they’ve created round 6000 jobs and attracted practically $1 billion in funding, whereas one other 50,000 folks have been to greater than 1000 occasions there, and one other 4000+ entrepreneurs from regional NSW have dropped in to make use of free desks and assembly rooms there.
That’s in accordance with Funding NSW. That determine seems like an inexpensive ROI for taxpayers, particularly for those who examine to dimension, scale and returns of different authorities business help.
The Minns authorities broke the York St lease. How a lot doing that has price taxpayers is one thing Funding NSW mentioned it needed to “tackle discover” – a stunning possibility since this debate is all in regards to the enterprise case and its price to taxpayers.
Noonan mentioned they’d been actively attempting to fill that area, there wasn’t market demand.
“So I believe we return to the purpose, and the rationale the choice was made was that the business fashions of the anchor operators within the Sydney Startup Hub was not viable primarily based on post- Covid working habits of startups,” she mentioned.
A historical past of price slicing
In the meantime, please bear in mind is that the NSW authorities gutted Investment NSW in April 2024, with a quarter of its workforce cut, and positioned it underneath the management of premier Chris Minns, the man who can find $16 million for cage fights staged by a verbally abusive promoter, but cut startup funding, including to the Sydney Startup Hub, when Labor got here to energy in 2023.
The federal government is spending $5 million in capital expenditure on the relocation, together with making the scaleup hub extra appropriate for startups, with a refurbishment of stage 13.
Again at York St, 3.5 ranges on the CBD hub have been empty for “a while”, Noonan mentioned, and there has not been a “market demand” to switch departed company tenants like Optus and Caltex.
“We seemed on the market demand on the [startup] hub, and we seemed on the present occupancy of the Scaleup Hub. We thought there was an actual alternative to consolidate providers and programming for startups in any respect phases of their journey inside Tech Central,” she mentioned.
“So our view and our modelling was that that was the very best plan of action.”
Munro requested what was taking place with Fishburners saying “they’ve began partnering with WeWork – is that as a result of they haven’t been capable of come to an settlement that enables them to maneuver into Tech Central?”
“We’ve been partaking intently with fish burners all through this complete course of. My understanding with Fishburners is that they’ve had a reasonably important have a look at their enterprise mannequin and looking out on the wants of startups that they serve,” Noonan replied.
“And so they’ve really had suggestions from residents that they’d choose a extra networked method, together with residency right here in Sydney, but in addition in places around the globe which the partnership with WeWork.”
She didn’t need to touch upon what’s taking place or the price of desks on the new location as a result of “we’re in negotiations presently with the anchor operator [at the Scaleup Hub]… so I wouldn’t need the assertion I make right here to affect the result of these negotiations for each Fishburners, different operators within the ecosystem, and clearly for startups themselves will accommodate.”
“Negotiations” is actually gobsmacking. Eight. Months. On.
It’s laborious to imagine that anybody within the Startup Hub, given the sector’s mindset, tried to tug out negotiations, so the place ought to blame be apportioned for uncertainty for the lots of of founders and startups on the lookout for a spot to work and unclear about their future within the week when the federal government is shutting down the location?
Munro requested about why it’s shutting now, when the unique launch mentioned October. Funding NSW appeared unaware of that element. We quoted Minister Chanthivong’s “October” announcement here final December in the event that they want a reminder.
Not my fault
Earlier in Funds Estimates, minister Chanthivong, who proved to be a master of delegation in terms of who was responsible for decisions, blamed the previous Coalition authorities for the demise of the prevailing Startup Hub. The Laboregovernment made the “proper choice”, however Funding NSW is liable for what’s taking place with the relocation.
TL;DR. Wasn’t me gov, sincere fact.
“The federal government made the choice to wind up the Sydney Startup Hub primarily based on the truth that the contract that was signed by the previous authorities was so dangerous that it wanted to be completely revamped,” Chanthivong mentioned.
Munro requested is the minister would meet with the startup sector to listen to their issues.
He obfuscated and declined.
The promise
“New lodging at Tech Central will embody a refreshed service providing extra attuned to supporting numerous folks and groups to startup and scale efficiently. It’ll proceed to supply an inexpensive place for each startups and scaleups to satisfy, collaborate, work and develop,” the Investment NSW website explains.
“This transfer helps guarantee startups and scaleups can collaborate with a complete ecosystem proper on their doorstep. It’s all about giving the help to construct Australia’s subsequent tech unicorn.”
One other option to describe the federal government’s plan – it’s hoping to launch an precise technique for Tech Central at some unnamed time down the observe may finest be described as Covid redux.
It’s hoping that by strolling previous Canva in Surry Hills on the way in which to work, startup founders may catch unicorn vibes and change into billion-dollar tech corporations too.
Then the minister can stand beside them in successful story picture alternative.
Besides he received’t get to, nor will future ministers, as a result of proper now, Sydney startups should survive regardless of the NSW authorities, not due to it.
Startup Day by day approached the minister’s workplace with an in depth listing of questions, however didn’t obtain a response earlier than publication. It has now been included beneath
Stone & Chalk and Fishburners additionally didn’t response to requests for remark.
- Editor’s notice: A spokesperson for the minister issuing the next assertion shortly after publication:
“The Sydney Startup Hub is a main instance of the Liberal-Nationwide Authorities’s legacy of waste and mismanagement.
“After they signed the contract to run the Hub in late 2022, they knew the COVID-19 pandemic had impacted startups and lowered demand for workplace area.
“Since then, the hub has persistently struggled to fill obtainable desks, generally sitting at round 50% capability.
“Former Minister Alistair Henskins and the Liberal-Nationwide Authorities locked taxpayers into subsiding workplace area that nobody needed. Their choice has left taxpayers, authorities, startups, and anchor tenants all worse off.
“Funding NSW stays in negotiations with Stone & Chalk, the anchor tenant on the Scale Up Hub, for the transition of start-up providers into a brand new Tech Central Innovation Hub.
“The NSW Labor Authorities tackles points head on to wash up the mess that the Liberals left behind and we’re working to make sure the brand new Tech Central Innovation Hub is sustainable and worth for tax payer cash.
“Transitioning to Tech Central will allow founders, entrepreneurs, buyers, and corporates to collaborate extra intently with universities and analysis institutes, in Australia’s main innovation precinct.
“Within the 2025-26 Funds, the NSW Authorities dedicated round $80 million in help for the innovation sector, together with $38.5 million for Tech Central.”
- Disclosure: Startup Day by day hosted common occasions on the Sydney Startup Hub, and sponsored a few of its tenants. Fishburners CEO Majella Campbell cohosts Startup Day by day’s weekly podcast, Startup 360, with this author. We additionally utilized for an Funding NSW grant for the Finest in Tech awards, but it surely was declined.
