Small Business

License article

Smartphone start-up taps into near future

When Jamie Conyngham saw mobile phones equipped with near field communication, he saw a business opportunity.

With many years of experience in the mobile phone sector, he and one of his business partners, David Kainer, had seen technologies come and go, but saw something new in near field communication (NFC).

“We just knew NFC was going to be huge because it was so simple,” says Conyngham.

Near field communication allows smartphone users to interact with almost any real-world objects such as posters, clothes and shop windows through a chip embedded in the object. Its appeal lies in its simplicity – all users do is tap their phone on the object to start transacting or downloading information.

Conyngham and his partners decided to build a business to take advantage of the new technology. While mobile payments were an obvious application, it was already a crowded space, dominated by the banks and large specialist payment companies such as PayPal.

So they founded Tapit, which uses NFC to deliver marketing content to smartphones.


Their first client was radio station Nova FM, whose parent company was recently purchased by Lachlan Murdoch. Users entered a competition and got the radio station streaming on their mobile phones, just by tapping it against the Nova poster. Among other projects, the company has also installed the system on The Rocks Walk, which gives tourists information about different sites as they walk around the historic area in Sydney's CBD. The company is also working with the Australian Museum in Sydney to “tapify” its exhibits.

Retailers can use it in-store to provide information about products and to cross-sell other products.

The chips embedded in posters or shopfronts don't actually transfer information to the phones. Instead, they tell the phone to go to Tapit's servers to retrieve the content. This is important because it means a company can easily update its marketing content at hundreds or thousands of sites from a desktop without needing to change the chips.

Andrew Davis worked in marketing before joining Tapit as a founder after he saw how simple it was to use. Unlike other systems, Tapit doesn't require users to download an app, use their phone's camera, or search any information.

“My problem working in the marketing side was always getting content onto the phone and when they showed me the possibilities of NFC and how you use it I just knew straight away that it was going to be a major force in the future,” says Davis, 30. “It's really effortless. My mum can use Tapit and that excites me, because she doesn't know how to download an app.”

With a $130,000 New South Wales Department of Trade and Investment grant, and a $400,000 investment from Sydney Angels, the Tapit founders started building their system and launched the company in August last year.

While investors believed in the system, potential clients were initially unsure about the technology and whether NFC would take off. “You were saying 'they will come', but no one really believes you and they want proof,” says Conyngham, 42.

Whether mobile phone makers would stick with NFC was always a risk for the business. But a year later, all of the major phone manufacturers bar Apple have committed to the technology. Deloitte forecasts that 300 million NFC-enabled smartphones, tablets and e-readers will be sold in 2013.

Apple, in a long-awaited decision, recently announced it would not include near field communication on its iPhone 5.

Conyngham, speaking before Apple's announcment, said that it would be better for Tapit if Apple adopted the technology, but not essential. The iPhone is not nearly so dominant in other countries as it is in Australia.

While Tapit has competitors in the US and the UK, it has several overseas clients in Singapore, Dubai, the UK and other parts of Europe among others. Conyngham says the company is seeking $2 to $4 million in venture capital funding.

“We're looking for expansion capital now because we've got too many leads coming through,” he says. “We've got worldwide interest now.”

Like many other local start-ups, Tapit is considering going to the US for funding. “If you're seeking [funding] in the US there's more money chasing fewer deals, so you end up with a better deal,” he says. “You've got about 500 [venture capital firms] in Silicon Valley, and you've got about five or six in Australia.”