Australia is a mature market for startups, but significant challenges remain

Phil Morle speaks at Tech in Asia Singapore ’15

With an overall population of 23.8 million people and average GDP per capita of US$67,463, Australia ranks comfortably as a high-income country. And that bodes well for the growing startup ecosystem down under.

According to Phil Morle, CEO of Sydney-based incubator Pollenizer, Australia is a mature, developed market and ideally suited to host companies that are looking to launch globally-disruptive products. Approximately 85 percent of Australian households have access to high-speed internet and smartphone penetration is around 90 percent. “Consumers have a large amount of disposable income, and are willing to spend across a range of verticals,” he adds.

The first wave of growth in the Australian startup ecosystem was fueled by the emergence of online marketplaces, best exemplified by Freelancer. Today, marketplaces have a cumulated worth of US$10.3 billion, including startups such as Seek andRealestate.com.au. “After marketplaces, the hottest new segment is now SaaS, with Atlassian alone worth over US$3 billion,” says Morle.

Startups in Australia also have a large pool of qualified talent to help build their businesses. There is a significant number of developers and engineers with Silicon Valley experience, and while they will be expensive to hire, their knowledge is key.

However, despite these impressive facts, significant challenges remain that prevent Australia from establishing itself as a regional hub of startups and entrepreneurship. Consumers and companies alike are overwhelmingly risk-averse, and as a result startups are more amenable towards building “safe” products rather than those that can be considered truly innovative. Surprisingly, funding is also another hurdle, with investors shying away from Series B and Series C rounds, preferring seed investments instead.

This is part of the coverage of Tech in Asia Singapore 2015, our event running on May 6 and 7.