Sydney Startup Hub shuts down as we speak, after seven years, because of the NSW authorities.
And proper now it’s clear that in terms 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 know-how 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 remains to be unclear.
The minister, who appears busier than a Round Quay busker, can be in control of the higher regulation, honest buying and selling, trade, commerce, constructing and corrections portfolios.
Minister Anoulack Chanthivong on the NSW Price range Estimates committee listening to this week. Screenshot
So you would forgive him if startups should not on the prime of his precedence checklist. The sector extra broadly, and this author, have picked up that vibe since Labor got here to energy in 2023 and kicked off by slicing funding to the Sydney Startup Hub.
The Hub has been dwelling 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 per week.
Its significance to the sector needs to be remembered in Tim Fung, chair and CEO of ASX-listed Airtasker turning as much as assist construct the Tank Stream Labs web site there.
Since Chanthivong introduced the transfer, the brand new location felt like a state secret for many of 2025.
However we now know, because of the Funding NSW web site 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 executed
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 present web site, is Fishburners, which even because the doorways are supposed to shut, awaiting a inexperienced gentle for its transfer, is staying put till no less than 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 house Tank Stream Labs and accelerator and investor Antler gained’t be a part of the brand new web site 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.
But it surely’s price remembering that they misplaced $6.95 million within the 12 months to June 2023, on prime 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 Each day in March 2024 that: “Over the previous six months, we’ve applied a complete motion plan to fortify our monetary place and safe long-term sustainability. Now we have efficiently labored with our companions to safe extra funding, and on the identical time, seen vital development in our nationwide startup and scaleup neighborhood.”
Stone & Chalk’s consolidation from outdated web site is smart in that gentle, particularly given the repeated assertion that York Avenue was “not commercially viable”.
The Covid pandemic reworked how folks work and whereas the federal government subsidised the Startup Hub web site, it’s clear that Stone & Chalk, in addition to Tank Stream Labs and Fishburners struggled below a brand new monetary dynamic.
However the query stays within the context of early-stage startups: what does business viability seem like and what’s the easiest way to assist corporations with little money and sometimes pre-revenue if you would like them to return to town?
In spite of everything, premier Chris Minns is the one who referred to as for employees to get again to their CBD workplaces to assist the financial system.
A scarcity of desks
There was additionally a telling second throughout the NSW Price range Estimates committee hearings on Monday, when the Funding NSW management was requested concerning the change and the maths didn’t add up.
Liberal MLC Jacqui Munro, the shadow assistant minister for innovation, stated her understanding was that “Wynyard had about 600 desks obtainable, and now there is perhaps 250 desks obtainable”.
Funding NSW head of innovation and entrepreneurship Liza Noonan stated 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 stated – 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 house throughout two flooring, with round 150 desks. It was developed by the previous Coalition authorities.
Noonan stated there’s no less than 100 extra desks obtainable on the Pitt St web site for the transfer.
I’m not Sir Isaac Newton, however might I counsel that if “round half” of 600 desks had been getting used, and the brand new supply is “no less than” 100, and apparently 60 startups have already put their hand up for house, even when you assume the 150 scaleup hub desks are additionally obtainable, you’re nonetheless providing much less house 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 arduous to determine whether or not it’s a difficulty in comparison with the outdated web site. Are founders being priced out of Sydney? We don’t know.
Noonan informed Price range Estimates “we do imagine there’s emptiness. I’d should tackle discover the precise quantity of emptiness throughout the Stone and Chalk flooring”.
Followers of Sir Humphrey in Sure Minister would respect the genius of this: there are vacancies on the web site the place we haven’t sorted out who’s operating the place and nor a deal to relocate the organisation desires to maneuver in. There needs to be a podcast on how detectives solved the thriller of the empty desks.
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 almost $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 response to Funding NSW. That determine seems like an affordable ROI for taxpayers, particularly when you evaluate to measurement, scale and returns of different authorities trade assist.
The Minns authorities broke the York St lease. How a lot doing that has price taxpayers is one thing Funding NSW stated it needed to “tackle discover” – a shocking choice since this debate is all concerning the enterprise case and its price to taxpayers.
Noonan stated they’d been actively attempting to fill that house, there wasn’t market demand.
“So I feel 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 stated.
A historical past of price slicing
In the meantime, please bear in mind is that the NSW authorities gutted Funding NSW in April 2024, with 1 / 4 of its workforce minimize, and positioned it below the management of premier Chris Minns, the man who can discover $16 million for cage fights staged by a verbally abusive promoter, but minimize startup funding, together with 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 degree 13.
Again at York St, 3.5 ranges on the CBD hub have been empty for “a while”, Noonan stated, and there has not been a “market demand” to switch departed company tenants like Optus and Caltex.
“We appeared on the market demand on the [startup] hub, and we appeared on the present occupancy of the Scaleup Hub. We thought there was an actual alternative to consolidate companies and programming for startups in any respect levels of their journey inside Tech Central,” she stated.
“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 in a position to come to an settlement that enables them to maneuver into Tech Central?”
“We’ve been participating intently with fish burners all through this complete course of. My understanding with Fishburners is that they’ve had a reasonably vital take a look at their enterprise mannequin and searching on the wants of startups that they serve,” Noonan replied.
“They usually’ve really had suggestions from residents that they’d favor a extra networked method, together with residency right here in Sydney, but in addition in areas world wide which the partnership with WeWork.”
She didn’t wish to touch upon what’s taking place or the price of desks on the new location as a result of “we’re in negotiations at the moment with the anchor operator [at the Scaleup Hub]… so I wouldn’t need the assertion I make right here to impression the end result of these negotiations for each Fishburners, different operators within the ecosystem, and clearly for startups themselves will accommodate.”
“Negotiations” is really gobsmacking. Eight. Months. On.
It’s arduous 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 in search of a spot to work and unclear about their future within the week when the federal government is shutting down the positioning?
Munro requested about why it’s shutting now, when the unique launch stated October. Funding NSW appeared unaware of that element. We quoted Minister Chanthivong’s “October” announcement right here final December in the event that they want a reminder.
Not my fault
Earlier in Price range Estimates, minister Chanthivong, who proved to be a grasp of delegation by way of who was liable for selections, blamed the previous Coalition authorities for the demise of the present 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, trustworthy reality.
“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 unhealthy that it wanted to be completely revamped,” Chanthivong stated.
“The communication course of with the tenants has been taking place since late final yr, the federal government made a really clear choice in winding up the Sydney Startup Hub given its non-commercial viable nature, and the administration technique of the relocation of tenants, is one thing that I’ve tasked the Funding NSW to handle.”
Munro requested is the minister would meet with the startup sector to listen to their considerations.
He obfuscated and declined.
Minister, I’m asking you on behalf of the startup sector and founders in NSW to decide to holding a public listening to the place folks can ask you and Funding NSW questions in order that they know what’s coming and what’s taking place from you, because the minister accountable. Will you’ll you do this?” Munro requested, for a second time.
“Look, Stone & Chalk assist the transfer and as do the anchor tenants. The federal government, by Funding NSW, has tasked the division to offer ongoing assist and recommendation for individuals who search to relocate,” Chanthivong replied.
The promise
“New lodging at Tech Central will embody a refreshed service providing extra attuned to supporting various folks and groups to startup and scale efficiently. It would proceed to supply an reasonably priced place for each startups and scaleups to fulfill, collaborate, work and develop,” the Funding NSW web site explains.
“This transfer helps guarantee startups and scaleups can collaborate with a complete ecosystem proper on their doorstep. It’s all about giving the assist to construct Australia’s subsequent tech unicorn.”
One other approach to describe the federal government’s plan – it’s hoping to launch an precise technique for Tech Central at some unnamed time down the monitor may greatest 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 grow to be billion-dollar tech corporations too.
Then the minister can stand beside them in successful story picture alternative.
Besides he gained’t get to, nor will future ministers, as a result of proper now, Sydney startups should survive regardless of the NSW authorities, not because of it.
Startup Each day approached the minister’s workplace with an in depth checklist 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 be aware: A spokesperson for the minister issuing the next assertion shortly after publication:
“The Sydney Startup Hub is a primary instance of the Liberal-Nationwide Authorities’s legacy of waste and mismanagement.
“Once they signed the contract to run the Hub in late 2022, they knew the COVID-19 pandemic had impacted startups and diminished demand for workplace house.
“Since then, the hub has persistently struggled to fill obtainable desks, typically sitting at round 50% capability.
“Former Minister Alistair Henskins and the Liberal-Nationwide Authorities locked taxpayers into subsiding workplace house 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 companies 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 Price range, the NSW Authorities dedicated round $80 million in assist for the innovation sector, together with $38.5 million for Tech Central.”
- Disclosure: Startup Each day hosted common occasions on the Sydney Startup Hub, and sponsored a few of its tenants. Fishburners CEO Majella Campbell cohosts Startup Each day’s weekly podcast, Startup 360, with this author. We additionally utilized for an Funding NSW grant for the Greatest in Tech awards, but it surely was declined.
