The Australian state of Victoria is home to at least 11 unicorns with a combined market capitalization of more than $ 40 billion. These include Real Estate Australia Group, Carsales.com, Seek, Airwallex, MYOB, Aconex, and Envato. Additionally, global technology leaders, including Zendesk, Amazon, and Square, have chosen to establish a regional headquarters in Melbourne.
Opportunity in a rapidly expanding market
Victoria is increasingly becoming a highly sought after destination for digital technology companies and startups in Asia Pacific. Judy Anderson, CEO of Startup Victoria, Australia’s largest network of entrepreneurs, says: “Relative to other ecosystems in the world, the Victorian startup ecosystem is by no means the largest or the richest, but we are one of the fastest growing ecosystems in the world. ” She points to the fact that the Startup Genome ranked Melbourne as one of the 35 fastest growing ecosystems on the global stage. However, Judy stresses that the Victorian startup ecosystem is relatively “childish” compared to larger counterparts like Silicon Valley, Tel Aviv or London.
“Today, Startup Victoria is a community of over 60,000 entrepreneurs and startup enthusiasts. But it started with a dozen passionate entrepreneurs meeting on a Friday night over beers in one of Melbourne’s first co-working spaces. , Inspire9, in 2014. This trip of more than a dozen to a community of more than 60,000 people has been fueled by Victoria startups that succeeded early on and became Unicorns, explains the CEO. Reaching scale in a short space of time have paved the way for high-caliber technology and entrepreneurial talent to join the ecosystem, and in turn, these talents have been giving back to the ecosystem through mentoring and mentoring other entrepreneurs. All of which has helped accelerate the maturity and diversity of business types, Judy says.
The early days of Victoria’s startup ecosystem saw a predominance of marketplace and SaaS startups, but over the years the ecosystem became much broader. Today, Victoria has a high density and maturity of startups in the health and life sciences sector, edtech, fintech, agritech, cybersecurity, among others. The state’s fintech sector is leading innovation in banking and payments, credit and loans, insurance and wealth management with more than 330 fintech startups. Three of the five Victorian fintech unicorns, Airwallex, Judo Bank and Afterpay Touch, are among the top 100 fintech innovators in the world. Home to a quarter of Australia’s agricultural businesses, Victoria’s thriving agtech sector is at the forefront of an industry predicted to be worth A $ 100 billion by 2030.
‘Favorable’ for startups
Victoria’s growth as a global startup ecosystem has been driven by a number of factors, says Judy. The quality and a large pool of talents in key technological areas has been a great attraction, the other has been the interest and commitment of the state government to allow the growth of the ecosystem. “The state government has been interested in developing the startup and technology ecosystem through investments and policy creation aimed at allowing companies to grow faster. By stimulating companies through foreign investment, we are making it easier for companies to startups raise capital, “he says.
LaunchVic, Victoria’s startup agency, was instituted for the sole purpose of growing the state’s startup ecosystem by investing in organizations and projects that support startups to scale innovative companies. “LaunchVic has allowed millions of dollars of funding. This includes the $ 120 million Victorian Startup Capital Fund (VSCF), a fund of funds announced in the Victorian budget earlier this year,” shares Judy. The fund aims to support early stage Victorian technology-based startups with the potential to become high-performance businesses. Additionally, LaunchVic has been instrumental in launching dozens of new accelerator programs, entrepreneur-in-residence programs, and talent that have helped many early-stage startups and young entrepreneurs. The visa waiver program, tax incentives and financial grants for R&D-related activities, and marketing grants from the Australian government also act as force multipliers for startup growth.
While the availability of talent through specializations, policies and investments in favor of startups have been key factors, the other has been the “ecosystem connection”. The Victorian startup ecosystem is a well-connected space. We see many founders helping and learning from each other. This helps map talent and address symbiotic challenges, “Judy says. The COVID-19 pandemic has also sparked a surge in talent taking the entrepreneurial route.” Today, many people are starting businesses and creating high-value technology solutions to some of the biggest problems we face in our everyday lives around the world, “he says.
Scope of the market opportunity
Sure, Victoria’s burgeoning startup ecosystem and its favorable policies present a viable opportunity for global startups to venture into the local startup ecosystem in Australia. In addition, it brings access to consumers. “It could function as a great secondary market for global startups,” shares Judy.
In 2019, the Australian $ 3.8 billion fintech sector saw 252 percent growth in fintech investment. One in 10 Australians used a Buy Now Pay Later (BNPL) product and two out of three payments at the point of sale were contactless payments, a clear indication of the high affinity for innovative fintech solutions in the Australian market. With more than 40 percent of consumers yet to become fintech adopters, the market is projected to grow further to $ 18 billion by 2030, according to Frost and Sullivan. Additionally, Australia has regulatory settings that favor fintech adoption. The Australian Securities and Investments Commission (ASIC) Enhanced Regulatory Sandbox allows fintech companies to test their services for up to 24 months without an Australian financial services license or credit license. All of this points towards the opportunity that global fintech startups can explore in Victoria.
The edtech sector is another example that makes Victoria the perfect test bed for innovation for local and global startups. With an international education sector valued at more than $ 13.7 billion, education has been Victoria’s largest service export industry for over a decade, delivering global products that are transforming learning and steadily increasing the world’s edtech revenue. state. Victoria is home to 33 percent of Australia’s dynamic edtech companies, supported by a significant increase in investment since 2019, including Seek’s A $ 118.5 million investment in joint venture partner Swinburne University. The Victorian Government has invested AU $ 10.8 billion in the entire education sector in the last four years.
Interestingly, Melbourne’s success story began with the gold rush of the 1850s and 1860s, when it was aone of the largest cities in the British Empire and one of the richest in the world, earning it the nickname ‘Marvellous Melbourne’. Over the years, Melbourne developed into a diversified economy. In the mid-20th century it became a thriving industrial center. In the late 1990s, the city established its advanced manufacturing and service prowess. In the early 2000s, Melbourne made its mark as a city of knowledge with its thriving education sector. And, now clearly the startup capital of Australia, it is becoming a global destination for startup growth and innovation. Judy says, “Today, even though our startup ecosystem is small on the world stage, it is powerful.”
