Why should Southeast Asian startups consider expanding to Melbourne?

The city of Melbourne, located in Australia’s state of Victoria, is a multifaceted place. It’s an international city and a hub of art, history, and culture – as well as a rising startup ecosystem in Asia Pacific.

According to Startup Genome, the city came in 36th in its 2021 list of global startup ecosystems, and it saw US$529 million in early-stage funding that year. Melbourne’s startup ecosystem also grew in value to roughly US$7.6 billion in 2021.

Photo credit: robynmac / 123RF

The city is home to several Australian unicorns such as Afterpay, Airwallex, and Judo Bank. Melbourne also has a culture of entrepreneurship, a huge talent pool, and an open economic environment that’s giving startups the opportunity to thrive.

“Melbourne is still a relatively young ecosystem compared to other places in the world,” says Judy Anderson, the former CEO of Startup Victoria, a nonprofit grassroots founder community in Melbourne. “There’s a huge amount of energy in the city.”

It’s also proving to be a promising destination for Southeast Asian startups that are looking to expand beyond Asia, thanks to the opportunities and support that the state of Victoria can give.

What Melbourne has to offer

Underpinning the appeal that Melbourne holds for businesses in Southeast Asia are the strong ties between Australia and the region. The Australian government sees Southeast Asia as a key partner for trade and development. It has also enacted several policies to help drive investments into the country, including incentives to encourage research and development activities.

The state government of Victoria, in particular, offers more specific support for businesses entering Melbourne. Invest Victoria, the state’s investment attraction agency, provides services such as grants and cash flow loans to new startups in the city.

Melbourne is also home to many accelerators and incubators, which range from sector-agnostic organizations to dedicated, industry-specific programs.

Aside from its resources for startups, the city has other key features that make it appealing to founders looking to expand their businesses.

In Anderson’s view, Melbourne is teeming with talent, especially on the engineering and tech fronts.

Judy Anderson, former CEO of Startup Victoria / Photo credit: Invest Victoria

“Melbourne is famous for having some of the best engineering and developer talent in the world,” she explains. “If you’re looking for senior developers, the quality is insane, and in terms of the more junior tech talent, we’ve got a lot of newly-trained tech and engineering talent coming out of the universities here, which are among the top universities in Australia for tech and engineering.”

Another key element of Melbourne’s appeal is the city’s connectedness. According to Anderson, the city’s startup community is tightly-knit, which means that new founders can easily find the resources, information, or introductions they need for their businesses. Startup Victoria, which is also one of Australia’s largest networks for entrepreneurs, runs community networking and outreach programs that help founders connect with prospective investors, partners, and employees.

While there are plenty of benefits, resources, and support available in metropolitan Melbourne, the broader region of Victoria presents more opportunities for startups to tap into. Victoria is home to over 6.6 million people spread out across both urban and rural territories, and there are a few key verticals that Anderson says are seeing more activity in the region.

“Melbourne is a wonderful city if you’re in health and medtech. We have great research facilities and institutions that we have set up here, at the University of Melbourne and Monash University,” she shares. “And if you’re working in agriculture or future foods, Victoria is a great place to be because we’ve got a really strong industry network in place.”

Navigating the ecosystem

Melbourne holds a lot of potential for Southeast Asian businesses, but the city’s startup scene is considered relatively young, which means that there isn’t as much support available for later-stage companies compared to other ecosystems.

Also, while the city is teeming with talent, getting people on board is not easy, as Southeast Asian businesses “will be competing with local startups for that talent,” says Anderson.

“So depending on the networking, connections, and relationship skills, connecting with the right talent could either be really difficult or perhaps a little bit easier,” she adds.

However, Melbourne has several initiatives in place to help make the journey a little easier for businesses entering the city. For instance, founders can turn to the city’s highly-connected startup scene for support. Invest Victoria runs an Advisory Network program where companies can connect with potential partners, and it also offers services that support businesses in setting up operations in Melbourne.

From Southeast Asia to Melbourne

It was the support of Invest Victoria that helped ease the entry of Singapore-based caregiving startup Homage into Melbourne in 2021.

Founded in 2017, Homage offers a suite of home and nursing care services, and it has over 3,000 care professionals in its network. In an interview with Invest Victoria, Homage co-founder and CEO Gillian Tee shared that the firm saw “a sufficient breadth and depth of need in Australia” for its services. She cited the larger demand across Asia Pacific for care services, which is seeing a fast-growing ageing population, rising chronic disease incidence rates, and an ongoing shortage of caregivers.

Gillian Tee, CEO and co-founder of Homage / Photo credit: Homage

However, making the shift into Melbourne took a lot of effort for Homage, as the company needed to navigate the different administrative and logistical demands of entering a new market. This ranged from building up a local team to adapting its workflows and operations so that it aligned with the regulations of the Australian government.

In the interview, Tee shared that Invest Victoria helped connect Homage to the relevant recruitment platforms, agencies, and office space providers to support the firm’s initial hiring and business setup process. The organization also helped Homage in facilitating visa applications for team members coming in from outside Australia.

Invest Victoria also introduced Homage to partners in Melbourne, such as carer and nurse training institutions as well as State Government representatives of Victoria, so that the firm could explore new partnerships and expand its local pool of trained and qualified care providers to support its services.

This helped smoothen Homage’s entry into Australia and ensured that the firm had a comfortable landing pad when it began operations in the new market.

Another Southeast Asian company that has decided to set up in Melbourne is Indonesian ecommerce major Bukalapak. The firm has chosen Melbourne as its first international base and has established a research and development center in the city. It aims to tap into Victoria’s pool of tech talent and explore partnership opportunities to further its goal of transforming lives through technology.

“Melbourne’s tech ecosystem is an ideal base for Bukalapak to establish this tech hub, which enables Indonesia’s tech talent to work together with tech professionals from Australia and around the world,” said Teddy Oetomo, president of Bukalapak, in an interview with Invest Victoria.

Growing and going further

The Victorian government is committed to enabling the growth of new ventures in the region and has launched new initiatives to support this. One of these initiatives is the Breakthrough Victoria Fund, which will drive investments in areas such as health and life sciences, agri-food, advanced manufacturing, clean energy, and digital technologies.

The government is also working to attract more capital into Victoria’s startup ecosystem, having invested US$59.8 million into the Victorian Startup Capital Fund, which aims to grow the region’s venture capital sector and drive investments into early-stage firms.

Additionally, Invest Victoria has established offices in key markets in Southeast Asia such as Singapore, Indonesia, Malaysia, and Vietnam. These offices facilitate a startup’s entry into Victoria by providing tailored assistance to help founders on their journeys to international expansion.

Anderson believes that these efforts, as well as the city’s connectedness and community, are what makes Melbourne a solid pick for Southeast Asian startups looking to expand their businesses abroad.

“We’re trying to create one of the world’s most thriving startup communities, where founders have easy and equitable access to the tools and the guidance that they need to succeed in business,” she emphasizes. “It’s so quick and easy to navigate this ecosystem and to find what you’re looking for really quickly so you can move faster and achieve more.”

Invest Victoria is the investment attraction agency of the State Government of Victoria, Australia. It bridges the gap between investors and the Victorian market and fosters long term economic prosperity by enabling business opportunities and job creation for Melbourne and Victoria.

Learn more about the opportunities Melbourne and Victoria hold for your business at the Invest Victoria website.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.