Investors bank on startup wins

31/08/2015 - 11:59

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Perth’s tech network has grown significantly during the past three years; what it needs next are some success stories.

Investors bank on startup wins
Canva: Founders Cliff Obrecht and Melanie Perkins.

Perth’s tech network has grown significantly during the past three years; what it needs next are some success stories.

If there were one point in time that marked the beginnings of Perth’s new tech startup ecosystem, it would be Friday September 7 2012.

It was almost three years ago that 100 ticketholders gathered for Perth’s first ‘Startup Weekend’ at Spacecubed, the (then) newly opened co-working space in the centre of the CBD.

The event was a sellout, and an intense experience for the 100 guests who took part in a frantic 48 hours of one-minute pitches, late-night team building, speed coding and 180-degree pivoting.

In a way, they were the pioneers of the startup scene in Perth, because in 2012, most of those that now feature in the startup network (see diagram) did not exist.

In fact, if the network were drawn in 2011, it would feature just four nodes – eGroup, Silicon Beach, Yuuwa Capital, and WA Angels Association; and each element operated in almost perfect isolation.

“The ecosystem always comes first, then some success stories, and finally the investors,” Yuuwa Capital’s Matt Macfarlane, an early investor in the scene, told Business News.

Three years on from that first Startup Weekend, where companies were formed and products launched over a madcap two days (with everyone returning to their day jobs a little bleary eyed Monday morning), BNiQ research shows more than 30 significant elements are now playing their part in the startup ecosystem.

The system is a mish-mash of various events, educational programs, accelerators, incubators and co-working spaces, with a couple of dozen people keeping most of it together.

Even the more established business award programs now incorporate startups as a category; and while a year ago there were no tech accelerators in Perth, there are now five up and running, with more on the way.

Two related issues therefore remain – generating more homegrown tech success stories, and funding. We will see more tech winners if more funds are made available to the early stage companies, but without winners, investors are wary. It’s chicken and egg time.

For a city renowned for mining and speculative investment, Perth has been slow to embrace the need for early stage tech funding.

In the search for funds, some tech companies have gone down the reverse takeover, or backdoor listing route.

Michael Malone’s iiNet is probably the only local billion-dollar tech business built from scratch, and the only one to stay and prosper here. But even here, the journey has ended. Two weeks ago, amid announcements of record sales and profits, iiNet’s sale to TPG passed the final administrative hurdle. Mr Malone had already left the company last year, and now resides in New South Wales.

Another local success story, Canva, founded by Duncraig couple Melanie Perkins and Cliff Obrecht, has long since moved to Sydney, after gaining an investment first mooted at an OzAPP Awards function a few years ago.

Meanwhile, former online share trading platform pioneer Steven Goh left for Silicon Valley in the past decade and ended up in Singapore, from where his mobile networking site, migme, listed on the ASX in 2014.

According to BNiQ, the business has produced an impressive 187 per cent total shareholder return over the past year (to the end of July 2015), and is currently worth more than $300 million. Mr Goh was back in Perth to visit family and attend his UWA alumni dinner two weeks ago, but as he told Business News, “I am barely even in Singapore these days, spending most of my time on a plane”.

Meanwhile, the burgeoning local tech scene goes about its business.


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