startups in australia

It’s an exciting time for Southeast Asia-based startups and there is no doubt that Singapore sits at the epicentre of a diverse range of markets rich with opportunity. New success stories are emerging throughout the region, such as GrabTaxi, which is experiencing explosive growth and attracting substantial investment.

Whilst the focus tends to be on those countries in the immediate vicinity of Singapore, there is one large, important market in the broader Asia Pacific region, which offers plenty of opportunity for Southeast Asia-based founders, companies and investors.

You won’t be surprised to hear me say that the market I speak of is, of course, my home country: Australia.

Also Read: 5 secrets of scaling across Asia Pacific: HotelQuickly’s Tomas Laboutka

Distance is not a problem

Australia may well be known for its cuddly koalas and lethal spiders, but beyond these tourism-fuelled images lies a country, which is quickly proving to be an attractive nesting ground for SEA-based tech startups. At just over seven hours’ flight from Singapore to Sydney, it’s also the perfect amount of time to clear your inbox and get a few of those documents finalised that you’ve had to keep pushing to the side.

Scoot’s cheap flights have helped to make the two markets all the more accessible and they even have Wi-Fi on the plane!

Small population, large market

While Australia is relatively small by population — it is a large market by potential revenue. Australia has a stable, prosperous economy with a regulatory environment favourable to innovation and competition. The local startup community in Australia at the moment is white-hot.

If you consider the current economic climate in Australia, there is a high-level concentration of legacy industries and structural issues within key market sectors such as banking, aviation and transport. It also means that these industries are ripe for disruption.

Also Read: Tapping into Asia’s mobile-first, smartphone-obsessed opportunity

Startup successes in Oz

Consider the Australian taxi market as an example of disruption and market opportunity. The average fare size is around USD$20. While the number of total annual trips is relatively small at 227 million a year — it is a lucrative market by regional standards at US$4.5 billion a year (third-largest in Asia Pacific after India and China) and US$800 million in profit. It is a highly concentrated industry with Cabcharge (Australia’s Comfort Del Gro), which was until recently a large monopoly with little competition.

Technology is now turning the tide. With increased competition, disruption is everywhere and Asia-based investors are beginning to see the opportunity in the Australian market. An example is Softbank’s US$50 million investment in BigCommerce, a Sydney based e-commerce platform provider that has achieved impressive traction in markets beyond Australia’s shores. Another example is Sequoia Capital’s Singapore office taking a US$12 million stake in LIFX. The list goes on.

We’ve also seen increasing examples of SEA-based technology companies, such as Patrick Grove’s listing of iProperty Group, iCar Asia and Ensogo listing on the Australian Stock Exchange (ASX) and accessing one of the largest pools of investment funding in the region, fuelled by Australia’s compulsory retirement savings scheme.

Why you should come to Australia and start a business

There has never been a better time to invest in the Australian market or expand a business into this market. The Australian Securities Exchange has made things a little easier. The rules for listing on the ASX aren’t as stringent as they are in other stock exchange operators in the region.

In Australia, companies don’t have to float a minimum percentage of stock in order to list, while Hong Kong has a minimum of 25 per cent and Singapore ranges from 12-25 per cent. Listing on the ASX is often a more appealing option, given its favourable listing requirements for early-stage companies.

Also Read: Joseph Ziegler’s tips to cure your technology hangover

Furthermore, with Australian resource companies in a downturn, there is a developing trend of tech startups undertaking reverse takeovers into mining shell companies. Given backdoor listings are considerably less prescriptive than IPOs, Asian early-stage companies can follow the path of Singapore-based mobile social network MigMe to get to an ASX listing faster, cheaper, and with fewer investors.

The views expressed here are of the author, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested to share your point of view, please send us an email to writers[at]e27[dot]co

Image Credit: Dan Breckwoldt/Shutterstock