Recognized as the world’s 13th largest economy, Australia has slowly but skillfully strengthened its startup ecosystem in the past few years. In fact, the startup scene in Australia is now considered one of the world’s fastest, with a growth rate of 5.8%. It may not be as high as the United States, but it’s still a significant improvement from the previous years.
The banking and financial technology or FinTech industries are major movers, although many businesses have also sprung in the e-commerce, SaaS-based solutions, and artificial intelligence sectors. These startups apply the latest technologies in their markets and industries.
Technology-focused startups in Australia are expected to provide approximately $109 billion to the country’s economy.
What is a Unicorn Startup?
Many Australian investors and organizations are interested in the unicorn startup concept. A unicorn startup is a private startup company that has a total market value of more than $1 billion. Business leaders, stockholders, and investors believe that startup businesses with the largest investment funding have better and more chances of raising revenues.
Unicorn startups, according to Aileen Lee (who invented the term) are very rare because not all of the thousands of tech startups that launch every year are capable of reaching the “unicorn” status. It takes around seven years before a startup in Australia – or anywhere for that matter, can become a unicorn business.
Two of the most popular unicorn businesses in the startup scene in Australia are Atlassian (makers of Trello) and Canva.
The Sydney Startup Hub
Australia’s startup capital, Sydney, has an innovation center called the Sydney Startup Hub. It is similar to Paris’ Station F and the US’ Cambridge Innovation Center (CIC).
Founded in 2017 through funding provided by the government of New South Wales, the hub acts as the primary venue for innovation programs, accelerators, incubators, and the country’s leading startups. It provides multiple opportunities for networking, funding, sharing experiences, and skills improvement. The Sydney Startup Hub is a tight-knit, diverse community of and for startups that want to connect with the different startup communities in the country.
The main objectives of the hub are to:
- Act as the support system for NSW’s new jobs creation projects
- Improve and encourage startup diversity by embracing regional NSW industries and non-ICT businesses
- Grow, develop, and strengthen the startup ecosystem in Sydney
The hub is vast at around 17,000 square meters. It has 11 floors and located at the center of Sydney’s busy business district. It houses work areas, team work spaces, meeting rooms, and a café. Its residents include startups, SMEs, established corporations and organizations, incubator residents, profit and non-profit organizations, and non-ICT companies. It also serves as the residence of several government agencies and companies. The hub has about 2,500 residents.
Some of Sydney Startup Hub’s popular residents include Caltex C-lab, Microsoft ScaleUp Program, and Stone & Chalk (Asia’s largest fintech).
A startup in Australia can enjoy community activities and events hosted by the hub. Residents are also entitled to MVP (Minimum Viable Product) grants and loans. The hub also features a small theater and demonstration areas that may be rented out for startup-related activities and events.
Australia’s Top Startups
Australia’s top startups have several things in common:
- they’re able and willing to innovate,
- they plan thoroughly, and
- they launch and execute their products in a timely manner.
Some of these startups have also reached unicorn status.
This list enumerates the top five startups in Australia according to funding (as of October 2020).
1. Judo Bank
This startup in Australia belongs to the financial services sector and is a unicorn company. Its business goal is to provide world-class financial solutions to SMEs. Its online platform provides loans and other SME needs. Judo Bank is managed by relationship managers. Total funding as of this writing is $1.7 billion.
Canva is a popular graphic design platform. Designers (and non-designers) use it to create professional-looking social media posts and graphics, presentations, business posters and cards, logos, videos, and other related design materials. It allows users access to license-free images and features a drag-and-drop designing tool and templates. Total funding as of this writing is $301.6 million.
Like Judo Bank, Spaceship is a financial services startup in Australia. It is focused on providing investment opportunities to younger generations. It has an online app where users can find diverse options for wealth-building and investment plans. Total funding as of this writing is $31.7 million.
This primary mover is also under the financial services sector. Uno’s goal is to help users make well-informed decisions for real estate-related matters, such as home loans and refinancing. Its online platform has features that provide options when searching for and comparing home loans. It also has calculators and other similar tools, in addition to real estate experts who freely offer support, guidance, and advice. Total funding as of this writing is $46.1 million.
This startup in Australia belongs to the professional services industry and offers design-related tools. The 99designs online platform is ideal for creatives who want to build unique designs for apps, videos, animation, brands and logos, merchandising, clothing, and advertising. Total funding as of this writing is $45 million.
Three of the top five startups in the list are from the financial services sector while the other two are focused on professional services and design. This is proof of how popular or dominant FinTech is in the startup scene in Australia.
What the Future Holds
Despite the setbacks of the 2020 global health crisis, the startup scene in Australia continues to thrive. In fact, many startups have had unexpected opportunities in the past months, with Canva leading the pack as it raised its valuation in June to a whopping $6 billion.
Recent developments in the technology industry are opening up opportunities for startup innovators and investors. Aside from AI, the popularity of blockchain and machine learning have also steadily increased in the past months. Two major factors of Australia’s startup scene growth are its being an English-speaking country and its prosperous startup economy. The presence of Sydney Startup Hub also contributed to the industry’s success.
The startup scene in Australia remains strong and is expected to continue contributing to the country’s economy as well as make a significant impact on the global startup market.