Aussie start-ups score free hosting

US hosting giant Rackspace has struck a deal with early stage venture capitalists Pollenizer to offer Australian start-ups free hosting for their first 12 months.

Under the terms of the deal, any early stage technology start-up Pollenizer invests in will be offered 12 months of free cloud hosting up to the value of $2000 a month on Rackspace’s Hong Kong facility.

After a year, the startup can either continue with Rackspace or take their hosting elsewhere.

Pollenizer invests in early stage technology start-ups and has already sold group buying site Spreets to Yahoo7 and recently invested in the likes of tablet publishing start-up MoGeneration, and crowdsourced live music promoter Posse. 

Rackspace kicked off a similar incubation program for US start-ups earlier this year and has already welcomed six incubators to the program.

Separately the company offers free hosting for software developers building tools for the OpenStack open source cloud platform.

Phil Morle, chief technology officer at Pollenizer said the Australian incubator had noted similar deals Rackspace struck with “inspiring” US incubators and was chuffed to have been approached.

“Startups, when they begin, are pre-revenue by definition,” he said. “Having someone like Rackspace provide high quality infrastructure is great – the full service Rackspace offers would otherwise be pricey at the beginning. This puts start-ups within reach of a premium service."

Jim Fagan, vice president of Rackspace Asia Pacific said the Texan-born company felt “obligated to help the cloud market grow.”

“Our goal is to make the pie as big as possible,” he said. “We’ll differentiate ourselves with great service and get a piece of the bigger pie ourselves.”

Fagan said Rackspace would leave Pollenizer to decide whether any given start-up qualifies as being commercially viable for funding and thus the free hosting.

“There are no limits on it, if [Pollenizer] think it's a bonafide company with good prospects, we will support them as well.”

New funding round

The Rackspace deal comes as Pollenizer raises $1.2 million from its “founders fund” for a new wave of start-ups.

Investors in the fund include some of Australia’s most successful technology entrepreneurs such as Atlassian founders Mike Cannon-Brookes and Scott Farquhar and tech advisor Tony Faure.

The founders fund contributed $500,000 last year but now wish to up the stakes.

These experienced entrepreneurs also provide mentorship and advice to their younger peers taking part in the program.

Morle said Pollenizer is “weeks away” from finalising the round of funding.

The company is “starting up to six new businesses every three months,” he said.