According to Genome’s Global Startup Ecosystem 2018 Report, the biggest tech startup ecosystem in Australia this year is in Sydney, New South Wales (NSW) – home to nearly half of the nation's startup businesses and ranked 16th on the global Startup Ecosystem Index.
The State of NSW and its regional government are actively supporting the startup ecosystem through organisations such as Jobs for NSW which help startups engage with potential business customers. With a pool of $190 million to fund investment projects over a four year period, Jobs for NSW currently provides financial support to startups as well as emerging and fast-growth small to medium enterprises by way of grants, loans and loan guarantees.
Dean McEvoy, Founder and CEO at TechSydney stated that “Sydney is an attractive business gateway for Australia and South East Asia and is rapidly becoming one of the best places in the world to build a high growth tech company. The city boasts a dense and fast-growing start-up community, robust government and regulatory support and a diverse and stable investment ecosystem”.
Overseas investments in the Australian start-up industry has reached $730 million in 2017 – of which 44% comes from NSW. To ensure the upward trajectory of Sydney’s ecosystem, the Sydney Start-up Hub opened in February this year to enable businesses, funding accelerators and entrepreneurs to all interact under one roof. The opening of the hub was a move to promote innovation, strengthen the startup community and grow new sustainable high-value jobs in NSW.
As we operate extensively within Sydney, our services at Progressive Recruitment also include providing startups with comprehensive solutions such as talent mapping and delivering mid-level management roles through to leadership positions on a contract, permanent, interim or retained basis, through our global database of candidates. Being a global specialist recruitment firm, we have a wider reach of candidates and as such, a higher probability of having candidates that align with our clients’ business structure and goals.
Fintech companies in Sydney
The Global Start-up Ecosystem 2018 Report had also stated that Sydney received the majority of Fintech venture capital in Australia, with a total of $171 million funding between 2014 and 2016. As a result, the city is considered as the financial hub with 64% of Australia’s Fintech companies. Sydney’s financial services sector contributes largely to 9% of national GDP – a scale that surpasses that of APAC’s other two major financial hubs; Hong Kong and Singapore.
To further support startups, Fintech accelerator Stone and Chalk has lent its expertise within the payments and lending vertical markets to facilitate funding available to startups. Sydney’s ecosystem currently has several key startups ($50+ million market cap) that are expected to move the sector forward – an example being Stockspot, Australia’s first robo-advisor. “Startups in Australia are booming. Capital availability is at record highs, our education system is producing high quality technical talent and governments on all levels are increasing support for high growth businesses. Sydney is taking a global leadership role in key verticals like Fintech,” shared Alex McCauley, CEO of StartupAUS.
Whilst Silicon Valley and the United States as a whole are still the top value creators in the global startup ecosystem—they are not as prominent as they once were. In recent years, there has been a shift in startup funding towards APAC countries. 8 out of the 10 countries with the biggest growth in patent productions in the past 20 years, are in Asia. This increase in knowledge production from 13.9% to 35% unicorns (i.e. privately held startup company valued at over $1 billion) is mainly due to China playing a primary growth driver in this shift. The increase in knowledge production is noticeable in two sub-sectors: Artificial Intelligence (AI) and blockchain. In 2017, Australia was ranked fourth globally for both AI-related patents and blockchain-related patents.
Further information regarding this trend will be provided at the CeBIT Australia conference. This month, the NSW government will collaborate with three groups – CeBIT Australia, the Australian Computer Society and the Business Centre, and will deliver a three day conference showcasing new technologies, the impact of AI and machine learning as well as the challenges and opportunities within startups.
Supporting female entrepreneurs in tech
With the huge potential of growth the tech sector can bring, there is also a need to bridge this potential with the relevant talent. Hence, the City of Sydney is further supporting women to become tech entrepreneurs through financial incentives. According to a press release published by the City of Sydney last week, local businesses would receive grants totalling $80,000 to facilitate access to entrepreneurship support, business skills and investment opportunities to tech startups.“To attract the best global talent, we are focused on creating an environment that helps innovative businesses to thrive,” said Lord Mayor Clover Moore.
To-date, three projects have been approved for delivery in early 2019. Tech Ready Women has received a grant to provide a 10-week educational program to 450 women in Sydney, therefore providing them with the business education and technological knowledge needed to launch and grow their own tech business. Within this program, women would have access to experts and mentors to help them become entrepreneurs.
Another example of a grant recipient is TechSydney; a member-based not-for-profit organisation that assists in the development of a website for tech startups that would be a central resource and information hub for the tech community in Sydney. TechSydney will facilitate a four-part event where entrepreneurs from Southeast Asia will give Sydney businesses an overview of the Southeast Asian technology landscape, specifically, the Fintech sector in Indonesia. The aim is to help international companies establish or invest in Sydney and likewise, help Sydney-based companies set up in Southeast Asia.
Encouraging tech startups in Sydney and increasing the density of the startup ecosystem would create more jobs and boost Sydney’s economy. According to the Economic Strategic Unit of the City of Sydney, the city’s tech startup ecosystem is still in its early stages of development. The aim is to build a robust ecosystem that would enable businesses to thrive together with a network of accessible technology, entrepreneurship education, infrastructure and funding.
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