END OF YEAR REPORT | 2016STONE & CHALK CELEBRATES ITS 1ST BIRTHDAY!

THE CENTRE OF GRAVITY FOR FINTECH IN AUSTRALIA

It has been an exciting first year at Stone & Chalk. As we celebrate our first anniversary, it is a chance to reflect on the projects and initiatives that Alex and the team have tackled over the last twelve months.

Our community has grown and our services expanded. We’ve curated a program of unique Masterclasses and launched a series of Ecosystem Talks. Stone & Chalk’s corporate partners are now a larger and more engaged group than ever before, resulting in more industry challenges being addressed and more benefits being delivered to our community.

We’ve made huge ground on key initiatives, such as our Fintech Asia Program, and following on from our annual National Fintech Cyber Summit, held in collaboration with the CSIRO’s Data61, KPMG and the Australia-Israel Chamber of Commerce, we are now looking for partners to help us launch the first Cyber Security Innovation Lab.

It is hard to believe that this time last year, Stone & Chalk had just opened. We’re a startup just like our residents and the many more in the Fintech ecosystem we support. In the last 12 months, we’ve become a community. Thank you for continuing to support Stone & Chalk through its next phase of development and we look forward to sharing new projects, adventures and successes with you.

FOREWORD FROM CRAIG DUNN,

CHAIR OF STONE & CHALK

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“We’re a startup just like our residents and the many more in the Fintech ecosystem we support.

In the last 12 months, we’ve become a community.”

On behalf of Stone & Chalk, I’d like to say thank you for being a part of this exciting journey. In our first twelve months, we have packed in a lot more than we had ever imagined possible. When we opened and rang the bell for the first time on the 25th August 2015, we had 40 startups and 100 individual residents. Just one year later, we’re proud to say that we’ve got a mix of 95 full-time and part-time startup companies and 294 of the brightest minds in fintech who call Stone & Chalk their home. The growth of our community over the last 6 months has been so strong that we have expanded to take over an entirely new floor of 70 desks on Level 1.

Many people ask me to explain to them what Stone & Chalk is and admittedly when I respond with “we are an innovation hub” it still leaves them with a lot of blanks. So the longer answer is that we are a physical platform that acts as a bridge connecting incredible startups with corporates, governments, investors and mentors. Our focus is on helping startups commercialise their propositions and helping those that have already launched to subsequently scale both locally and internationally. On the other end of the equation, we also help corporates and governments transform their internal culture, build their internal innovation capability and assist them to successfully partner with startups to deliver great outcomes for their customers.

What I’m most proud of is the very direct and tangible

contribution we have made in helping our residents secure

just over $101M of direct investment during the 12 months they have been here at Stone & Chalk!

This milestone, together with the volume of commercial deals

they have struck and the new high tech jobs they have created

is our ultimate measure of success. This is what all our efforts,

initiatives and programs are designed to help them achieve. We are grateful for being visited by the Premier for the launch of Jobs for NSW, as well as the Prime Minister for the launch of the National Innovation and Science Agenda and the announcement of the H2/First State partnership. The Treasurer chose Stone & Chalk as the place to announce his plan to ‘Back Australian Fintech’ and on other occasions we’ve welcomed Anthony Roberts, Ed Husic, Jason Clare and Wyatt Roy to discuss aspects of policy.

We’ve also had the pleasure of welcoming over twenty delegations from around the world, including countries as diverse as:

• Japan • China • United Kingdom • Singapore • Malaysia • Israel• United States • Korea • South Africa

These delegations have comprised of senior executives, fintech companies, investors, governments, banks and regulators, all wanting to know what Stone & Chalk is about and get an understanding of how we are helping to build the ecosystem. We’re so excited to reach this 1st birthday milestone and we show no sign of slowing down. Thank you for sharing an incredible twelve months with us, and we look forward to our collective journey ahead.

FROM ALEX SCANDURRA,

CEO OF STONE & CHALK

“Our focus is on helping startups commercialise and scale, both locally and internationally.”

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YEAR ONE: THE NUMBERS GAME

21 STARTUPS LAUNCHED

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TOTAL CAPITAL RAISED$101,160,000 12

COMPANIES EXPORTING

BIGGEST SERIES A ROUND:

$10.5M

TOTAL EVENTS

500+

• 40 STARTUPS• 100 INDIVIDUAL

RESIDENTS

DAY 1

• 95 STARTUPS• 294 INDIVIDUAL

RESIDENTS

DAY 365

4 STARTUPS

GRADUATED

+$50M startup fund raised by

5 STARTUPS COMPLETED

THE H2 VENTURES FINTECH ACCELERATOR

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From the early days of ‘Sweet Spot’ - our weekly community standup where residents share their successes over sweets, to our popular Masterclass series showcasing thought leadership from across the globe, to a host of Corporate Partner events such as networking drinks, Office Hours and Lunch & Learns; we have counted well over 500 events in the past year.

Community events empower, enable and uplift the broader Fintech ecosystem. We’re proud to have delivered, sponsored and supported a number of these important events, to name a handful: Govhack Hackathon 2016, Spark Festival (Sydney StartUp Week), HackerX speed dating for Devs, Startup Weekend powered by H2 Ventures (Australia’s only Fintech Accelerator based here at S&C), and a host of ‘Meetups’ such as Women In Fintech, Sydney Fintech, Blockchain and Customer owned-banking.

We have become a preferred venue for many of Sydney’s leading Financial Services firms, looking to spice up their team offsites and expose their clients to money can’t buy experiences. In June this year we launched our Ecosystem Talks, which aim to draw from the wealth of expertise that exists amongst our resident base, and share that knowledge with the wider community.

Our Community has seen 20 companies launch this year, most being held onsite with media in attendance. We had our first Stone & Chalk alumni grow up and leave the nest. Congratulations to Venture Crowd, Ordermentum, Full Profile & Rain Check!

The calibre of our first birthday celebration, which was coordinated by our FUNtech Committee, suggests our that we have come such a long way and there is so much to celebrate. Not only did we rock the theme Go For Gold, but we’re pretty sure we’ve set a new record for most champagne corks popped simultaneously in a Sydney hub. We can’t wait to see what next year brings!

IF YOU’RE INTERESTED IN HOSTING AN EVENT AT S&C, WE’RE ALWAYS KEEN TO HOST OTHERS IN THE FINTECH ECOSYSTEM. GET IN TOUCH WITH EVENTS@STONEANDCHALK.COM.AU FOR MORE DETAILS!

COMMUNITY & EVENTS UPDATE

“We have built a vibrant and diverse community that is the lynchpin for Australia’s fintech ecosystem -- something we’re all very proud of.” - Annie Le Cavalier, Community Manager

FINTECH ASIA PROGRAM

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The Fintech Asia Program has taken off, with the launch of our Incubation Exchange in July. The three selected Chinese startups have commenced their residency at Stone & Chalk, and after an exciting launch, have been hard at work bringing their businesses into the Australian market. In the months to come, along with a curated series of events and engagements, there will be opportunities for our resident to collaborate with these startups. Welcome to the community, S.Capitol, RoyalPay and MEGI!

FEATURED STARTUPS

MEGI Software (Shanghai) Co. Ltd

As the “Xero for China”, MEGI are providing cloud-based accounting software for entrepreneurs and companies in Asia. The purpose of the software is to reduce time spent on data entry, as well as automating complex, repetitive tasks and improving collaboration between people within the business. With a well-rounded team from China, Singapore, Hong Kong and Australia, they are well placed to take advantage of the market. RoyalPayBest described as the “QR-code-POS for SMEs”, RoyalPay has built Australia’s first one-stop mobile payment and payment-collection platform. It can be connected with current mainstream mobile payment terminals in the market. Their current focus is on providing mobile payment services to Chinese tourists’ outbound consumption. S CapitolS Capitol are ‘a bank for entrepreneurs’, founded in February 2015. As a market pioneer, they are taking advantage of the thousand-billion scale corporate cash financial market in China. They aim to streamline cash management for startups and make the process more enjoyable. They are currently taking care of over 1.2 billion RMB cash for young companies, and have provided financial services for over 1,000 startups.

BECOMING STARTUP READY

Stone & Chalk and FusionLabs have been collaborating to develop a Startup Ready program to assist corporate Australia maximise the benefit of working with startups. Co-creation sessions have been held with entrepreneurs from Fishburners and Stone & Chalk and representatives from our corporate partners to brainstorm what they wanted to learn from the program. Our new Head of Innovation, Andrew Purchas, has been hard at work developing materials our corporate partners will need in order to help them collaborate with startups. We are in the final stages of building the curriculum and look forward to sharing the outcome of months of preparation, consultation and collaborations. Watch this space!

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OUR INITIATIVES

CORPORATE PARTNER UPDATE This year, we’ve built an impressive portfolio of twenty-three engaged corporate partners. In some cases, corporates have taken on our startups as suppliers, while in other instances they have become customers of startups that offer a solution to a problem within their business. We even had one corporate partner, CMCRC, invest in one of our startups, Ordermentum.

Throughout the year we’ve hosted fortnightly Office Hours with specialists from our corporate partners, providing our residents with access to industry expertise. A number of executive teams have also attended our Executive Education Sessions, which aim to help corporates better understand the fintech ecosystem and hear from our startups. In the last three months, we’ve seen 2 new corporate partners join our community (shout out to our new friends at CUA and E&Y !) join our community and existing partners renewing their commitment and ramping up their engagement with our residents. A number of our partners have also held events and offsite training sessions, fintech-focused cocktail events and boardroom sessions. Foundation partners, whose joint financial and professional contributions of more than $2million have made the operation of S&C possible are: Allens, American Express, AMP, ANZ, Australian Stock Exchange (ASX), Capital Markets CRC, CUA, EY, FINSIA, Finzsoft (NZ), HSBC, IAG, IBM, KPMG, Macquarie Group, Optus, Oracle, Suncorp Bank, TAL, Thomson Reuters, Veda, Westpac and Woolworths.

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OUR INITIATIVES

FINTERN FEVER

At any one time, 15 of our startups are looking to recruit top talent to help them grow their businesses, and who better to provide an injection of fresh ideas than the best and brightest university students from all over Sydney. This year we hosted two rounds of the “Fintern Fever” Program, which resulted in the placement of over 30 university students in roles within our startups, with 7 of them moving into full-time paid employment. Our events space was twice transformed into a series of interviewing stations, and university students and entrepreneurs swarmed in the hope that they would recruit the perfect match for their startup. Fintern Fever is a collaboration between CSIRO and Data61’s career service, Ribit, FINSIA and Stone & Chalk.

WOMEN IN FINTECH

One of our earliest initiatives has been to build a program designed to increase female representation in the fintech sector. Only 4% of global banking CEOs are women The objective of the Women in Fintech initiative is to, as a technology and business community, address this gender imbalance. We want 50% of startups at Stone & Chalk to include a female founder by 2020, which we’re calling our ‘50/20 goal’. A more inclusive, diverse and collaborative sector that is designing services for all of the market will be of significant commercial benefit, and we are preparing to launch a Design Challenge to bring the ideas of female fintech founders to the fore. With our Women in Fintech partners, we will support startups through 3 key areas; funding, customers and expertise.

61NO. OF FEMALE RESIDENTS AT S&C

OUR INITIATIVES

MENTOR PROGRAM

The first round of the Mentor Program has closed and the feedback was fantastic. We received 350 applications to become a mentor, and 61 matches were made between our residents and top calibre mentors, with the formal relationship lasting 4-months. This resulted in over 250 face-to-face meetings and hundreds of emails. Our residents told us that they were encouraged to think laterally and explore different ways of approaching issues and challenges, as well as gaining media coverage and being introduced to potential commercial investors. Our mentors agreed that the experience had been particularly rewarding, saying that despite bringing experience and insight to the relationship, they were also constantly learning. We had one mentor invest in their mentee’s business while another became the Chair as a result of the mentorship! Given the great results of the first round, we’ve just launched Round #2 and can’t wait to hear what’s achieved.

350

611000+ MENTORSHIP INTERACTIONS

MATCHES BETWEEN STARTUPS & MENTORS

APPLICATIONS TO BE A MENTOR

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44 QUALIFIED LEAD MENTORS FINISHED THE PROGRAM

Thank you to our incredible lead mentors!

Trevor Allen

John Anschau

Mike Baldwin

Glen Barry

Adrian Bentley

Michael Bickerstaff

Andrew Bloore

Mark Bonnar

Simon Burke

Gavin Heaton

Paul Howdle

Mike Israel

Simon Keast

Lambert Kiang

Stefan Knight

Nicholle Lindner

Corrie McLeod

Sarah McWilliams

Reza Chady

Benjamin Chong

Andrew Davis

Rob Dunn

Edward Foley

Fran Foo

Anuraj Gambhir

Toby Gardner

Richard Gibbs

Shantini Nair

Imelda NewtonCindy NicholsonJames OrchardGrant PattisonMark PesceMathias RoyceTom RundleStephen Rutter

Cathy RyanRoger Samuel

Haydn Sheehan

Sarah Tritsch

Alex Twigg

Oliver Weidlich

Chris Whitehead

Jay Whittaker

WE LOOK FORWARD TO ACKNOWLEDGING MORE PEOPLE AS OFFICIAL S&C LEAD MENTORS DURING THE NEXT MENTOR PROGRAM DUE TO START IN OCTOBER 2016

CYBER SECURITY

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“STRONG CYBER SECURITY IS A FUNDAMENTAL ELEMENT OF OUR GROWTH AND PROSPERITY IN A GLOBAL ECONOMY... IT REQUIRES PARTNERSHIP INVOLVING GOVERNMENTS, THE PRIVATE SECTOR AND THE COMMUNITY.” - AUSTRALIAN GOVERNMENT, CYBERSECURITY STRATEGY

This year, we launched our National Cybersecurity Innovation Program, looking to develop our cybersecurity capabilities and give Australian fintech businesses a competitive advantage in the global marketplace. We have all the ingredients to succeed, given that Australia is home to top universities, has access to excellent local and global talent, has a digitally advanced financial services industry and a supportive set of government policies.

Announced in February, the three components of the program are:

• Firstly, the National Cybersecurity Summit (which was held in May 2016)• Secondly, the Cybersecurity Design Challenge which will commence in the second half of 2016 • Followed by the launch of the Cybersecurity Innovation Lab ( phases two and three are currently accepting Expressions of Interest to become a partner/sponsor).

In May, we engaged with the Prime Minister’s Cyber Security Task Force, and partnered with CSIRO’s Data61, KPMG and the Australia-Israel Chamber of Commerce (AICC). Our aim was to convene international experts with key stakeholders to discuss local cybersecurity capabilities and opportunities, as well as enabling collaboration between academics, startups, government and the private sector. Speakers included Dr Alan Finkel

(Australia’s Chief Scientist), David Thodey (Chair, CSIRO and JobsNSW) and Lynwen Connick (Cyber Policy and Intelligence, Department of Prime Minister and Cabinet). This was the first Summit of its type in Australia, bringing together industry, startups, government, universities and thought leaders. It was followed up by a Masterclass presented by Ron Moritz, Consigliere on Cyber Technical Due Diligence, who is usually based in Israel but was in town for the Summit.

In early September, we will be releasing our Cyber Security Report, which will outline the critical issues and key themes stemming from the Summit.

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CPDone has secured additional funding, signed up corporate customers and added new partners to their network. They have secured a large sale in Indonesia, enabling access to a market of 40,000 financial services professionals, along with new customers in Australia and Singapore.

Commencing their residency this quarter, Ezidox have met a wide array of other Stone & Chalk startups who have been willing to help and support them on their journey. They have also met with an amazing selection of corporates that are actively seeking innovative ideas, and say that they have benefited from increased credibility as a result of the association with Stone & Chalk.

Edstart have been granted a credit licence from ASIC, launched their first product into the market, experienced early traction to confirm product/market fit, received their first revenue and graduated from the H2 Accelerator program!

Map My Plan have raised additional seed funding and launched their white label solutions for advisory firms, industry super-funds and employers. They have focused on improving the functionality of their site and announced Hon Bernie Ripoll as a Director of Map My Plan.

QuietGrowth, the Automated Investment Manager (AIM), has introduced a new automated feature that allows clients to modify their personal circumstances, receive an updated Statement of Advice, and change the risk tolerances of their portfolios at no extra charge.

PayNow have significantly advanced their SME finance digital marketing and asset origination web-based platform. They have developed their P2P strategy, scoped out and developed a handheld invoice finance generator and launched their PayNow Card in gift-card pilot.

OpenOrbit have expanded their commercial pilots with four new organisations, won the Startup of the Year Award (NSW, iAwards) and commenced alliance discussions with academic partners. They are also close to announcing alliances with consulting partners.

IUNGO have closed two pilots and have signed up a strategic corporate partner. Most importantly, they have finalised their technology and are able to showcase it and run product demonstrations of their complete technology stack.

Brighte successfully closed their seed funding round. They have written their first loan and started their pilot program. Staff numbers are growing daily and they’ve now got an experienced team that is ready for business.

WordFlow have signed three government clients and opened POC negotiations with three financial services companies. They have engaged with ASIC, joined the Fintech Association and attended more than 10 events at S&C.

Mafematica have had serious interest from wholesale distributors in the financial services industry. They’ve raised $70,000 cash, secured a Business Development Manager, and attended the Money Management conference as a speaker, organised by Stone and Chalk.

Reinventure have raised a second fund of $50m from Westpac, which they are using to continue the growth of their portfolio and increase the team from 3 to 7 people. They have also helped launch FinTech Australia and the FinTech TaskForce with the Federal Treasurer.

RESIDENT NEWS: THE LAST 3 MONTHS

Metamako has employed 6 additional people in Sydney with more recruitment planned for the near future. They have just closed a major sale to the ASX to provide core network technology.

Macrovue have been granted an AFSL license, won pitches at Afiniation in Melbourne and the Money Management conference, raised a bridge round of capital, expanded the team and are readying up for their launch!

Nexpay have recently completed a capital raise of $400k and are now working on version 3 of their system which will hopefully deliver the scale they need to achieve their goals.

CapitalPitch have launched CapitalPitch Ventures Fund 1, an active lead investor for $250k - $3m into high growth startups. They have secured a partnership with the Tulla Group (Maloney Family office) and conducted Bootcamps for 40 high potential startups.

DSYNC are preparing for their launch at TechCrunch Disrupt in San Francisco. They will also be attending shop.org and Oracle Open World. DSYNC has been selected by KPMG for the exclusive mLabs program and are currently in negotiations with a bank for services.

EPG continued to grow their business, developing their understanding of their target market and the consumers they set out to help. In the next quarter, they will continue to innovate and find new revenue opportunities.

FCS have secured a regional distribution deal with a global consulting firm, undertaken commercial pilots and increased shareholder value by 4 times. They have improved their solutions as a direct result of extensive peer reviews with Stone & Chalk’s corporate partners and have a diverse sales pipeline which they are actively pursuing.

Onecheck have built their demonstration app for iPhone, complete with mobile SMS authentication, Optical Character Recognition of ID documents and a ‘selfie’ with liveness detector for facial recognition against ID. They have also developed patent-pending Script Validated Video Identity, linking a “real” person to the transaction.

Ripple have signed up the biggest bank in the Middle East (National Bank of Abu Dhabi) and commenced implementation. They will sign a global bank by the end of August and are looking to be working with Asian banks by the end of September.

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RESIDENT NEWS: THE LAST 3 MONTHS

LEVEL 2, 50 BRIDGE STREETSYDNEY NSW 2000

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