Australia’s booming technology sector is expected to emerge on the global stage

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When Melanie Perkins proposed to investors the idea of ​​building a graphic design platform for everyday users, she received more than 100 rejections and was told that she couldn’t do it in Australia.

But the 34-year-old entrepreneur persevered. Ten years later, Canva is valued at $15 billion and is part of a new wave of technology companies with global ambitions in the country.

“At that time, people thought that you could only build a company in Silicon Valley and wouldn’t invest in anyone they couldn’t visit regularly,” said Perkins, who grew up in Perth, Western Australia.

“Things have fundamentally changed. We are really lucky now to have a thriving technology ecosystem and many good venture capitalists who are thinking about how Australian companies can succeed on the world stage.”

In August, Square, the US payment group led by Twitter founder Jack Dorsey, promoted Australia’s growing position as a technology hub. Agree to buy Afterpay, a Melbourne-based “buy first, pay later” provider, spent $29 billion. If approved by shareholders and regulators, this transaction will be the largest acquisition in Australian history and will enhance the image of local start-ups among global investors.

As part of the transaction, Square will conduct a secondary listing on the Australian Securities Exchange (ASX), which promotes itself as an international hub for technology listings.

“There will be a global technology company in our benchmark index. This will make many people sit down and pay attention and treat ASX as a technology venue,” said Max Cunningham, executive officer of the exchange-listed group.

Since its launch in February 2020, the S&P/ASX All-Technology Index has grown to 79 companies, of which 17 were established outside of Australia.

The Covid-19 pandemic has promoted optimism about the Australian technology industry. The pandemic has pushed more companies to go online and has extremely low borrowing costs.

Atlassian is a software company headquartered in Sydney that produces products for other programmers, helping to push Australian technology to the global map. Listed on NASDAQ in New York In 2015, its valuation doubled and is now worth 83 billion U.S. dollars.

Atlassian founders Mike Cannon-Brookes and Scott Farquhar are leading the development of a technology cluster in Sydney. In August, Atlassian’s A$1.4 billion 40-story wooden tower headquarters received planning approval. The headquarters will establish a new technology center centered on the city’s main railway station.

Both Cannon-Brookes and Farquhar have set up venture capital funds to support Australian start-ups.

According to data from the Australian Investment Commission, Australia-focused venture capital fund managers received a record 1.3 billion Australian dollars in new commitments in 2020, almost twice the amount in the same period last year. This allows local technology groups such as Airwallex, Rokt, Safety Culture, Culture Amp and Canva to raise funds at high valuations.

Afterpay app on mobile

Groups including Google, Atlassian and Afterpay established the Australian Technical Committee to lobby the government © Brent Lewin/Bloomberg

Rick Baker, co-founder of Blackbird Ventures, added that Australia’s A$3.1 trillion pension industry and overseas investment are also energizing the industry. “American venture capital firms are really interested in Australia and have learned how to invest through Zoom,” he said.

Blackbird is an early investor in Canva and Zoox, the latter an autonomous driving startup that was acquired by Amazon for more than $1.2 billion last year. Last year, it raised a fund of 500 million Australian dollars.

Efforts to transform Australia into one of the region’s leading technology centers have attracted some strong supporters. Groups including Google, Atlassian and Afterpay established the Australian Technical Committee in August to lobby the government.

“Our focus will be on policies and actions that support the growth of the Australian technology industry and local and global investment,” said Robyn Denholm, chairman of the committee and the US electric vehicle group Tesla.

Not everyone believes that Australia’s technological boom will continue, which shows that companies are highly valued, many of which have never made a profit.

Atlassian founder Mike Cannon-Brookes and Scott Farquhar sat side by side

Atlassian founders Mike Cannon-Brookes and Scott Farquhar are leading the development of a technology cluster in Sydney © Atlassian

It was pointed out that Nuix, an Australian data analysis company, was listed on the Australian Stock Exchange in December. After lowering its revenue forecast for 2021, its stock price has fallen by about half.

It is also questionable whether Australia, a country known for its large mining industry rather than its promotion of innovation, can attract global talent.

The country’s domestic market is small and competition is fierce. Coronavirus mandatory restrictions A venture capital executive based in Singapore said about international and domestic travel.

Australia’s implementation of the world’s first laws aimed at cracking encryption and regulating social media has also raised concerns that the government is indifferent to the technology industry.

“The technology industry and its wide-ranging benefits to society are being hindered by weak government regulation,” Atlassian co-founder Farquhar warned in January that Canberra had issued a draft law that forced Google and Facebook to pay news publishers for their content. cost.

Baker of Blackbird Ventures also highlighted the cultural differences between Australian and American startup founders, saying that the former needs to raise their level of ambition. Australians tend to be “very laid-back and self-conscious”.

However, Canva is proving that its web-based platform attracts 60 million users every month, and it is possible to move from Australia to the world. Although the vast majority of people have logged into its free service, it is still expected to generate $1 billion in revenue this calendar year. The company has grown to 2,000 employees.

“The greatness of being rejected[for funding]… It’s really helpful to improve our strategy and the way we express our ideas and vision,” Perkins said.

“Making Australian companies succeed on the world stage helps people think about possibilities and start their own companies,” she added.

Supplementary report by Mercedes Ruhr in Singapore

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