Sydney is experiencing a cultural shift in the way venture capitalists view startups. The old mindset was that startups in Sydney needed a New York City or San Francisco office in order for investors to even want to throw capital at them. But that attitude is long gone.
“Large VC firms are now looking at Australian startups with interest, which is exciting,” says Chris Petersen, founder of Asset.Guru. “The old assumption that you had to have an office in the U.S. to gain funding doesn’t always apply.”
Even Australia’s federal government wants to pour cash into Sydney’s startups. Prime Minister Malcolm Turnbull recently backed a $1.1 billion budget that will promote business-based research, innovation, and development. He calls it the “ideas boom.”
And at the helm, 10 startup founders are stoked about pioneering this startup movement.
Founder of Asset.Guru
Because venture capital funding is harder to come by in Sydney, Petersen says most of the city’s startups bootstrap their way to success, causing corporations to pay attention to young companies.
“The obvious example is Atlassian, who recently IPO’ed after essentially bootstrapping to where they are and being cash flow positive from day one,” Petersen says.
Petersen says that’s good news for Asset.Guru, a cloud-based system that identifies fixed assets to help businesses maximize deductions.
“We see big corporations now assessing Asset.Guru,” Petersen says. “All this has resulted in dramatic change in Australia startups. With better information available, more people are willing to take the plunge to begin or simply work for a startup.”
Co-founder of DesignCrowd
Over the last eight years, Sydney’s startup ecosystem has exploded, says Lynch, co-founder of DesignCrowd, a creative marketplace connecting graphic designers and clients.
“Since first launching DesignCrowd, we have raised over $12 million and expanded internationally,” Lynch says. “We have 25 staff in our headquarters in Sydney in a suburb called Surry Hills, nicknamed ‘Silicon Hills,’ 23 in our Philippines office, and two team members in WeWork San Francisco where we’ve had a private office for over a year.”
Co-founder of LawPath
While there are a lot of young companies, a handful have matured, and the founders are now entering their second or third startup, says Andreasen, co-founder of LawPath, a cloud-based legal service provider. These entrepreneurs pass on their knowledge and share their personal experiences.
“The result is a ‘work hard, play hard’ mentality,” Andreasen says. “We’re lucky to have a supportive community that is happy to share ideas and resources and celebrate wins.”
He says local startups like LawPath are disrupting more traditional industries like legal and accounting.
“One of the advantages of the Sydney startup scene is that there is no one dominant industry, opposed to somewhere like the U.K. scene, that is heavily focused on the fintech space,” he says. “The more players there are, the richer the ecosystem will become.”
Co-founder of Shoes of Prey
Sydney’s startup scene is young, vibrant, and very supportive, says Jodie Fox, co-founder of Shoes of Prey, which customizes handmade women’s shoes.
“It’s young with regard to the ecosystem, which is still in early development stages when compared to the U.S.,” Fox says. “The opportunities in Sydney are vast compared to some of the more defined and institutionalized startup scenes. There’s also a really lovely openness to sharing knowledge and a humbleness that is inherent to the Australian culture.”
Sydney is the perfect place to test a startup idea and scale globally, says George, founder of OneShift, an online platform that matches people with jobs in Australia.
“We have some pretty amazing startups using Australia as a test case to scale their business globally, with everything from predictive data logistics businesses to big data being used to give more accurate readings on voting polls,” George says.
There are currently 176 scalable startups in Fishburners, Sydney’s largest co-working space, says George. It’s now up to founders to attract better talent, pump out cool ideas, and compete on a global scale.
Founder of Invoice2go
Sydney has its fair share of successful startups that have had an impact on the global economy, says Strode, founder of Invoice2go, an app that allows small businesses to create and send professional invoices. That energizes younger founders.
“Seeing Australian startups like Atlassian, Campaign Monitor, 99designs, and Invoice2go compete on a global scale and raise capital from the U.S. has shown the industry here that it absolutely can be done,” Strode says. “It’s driven a lot of attention and interest among entrepreneurs and investors, which is invigorating for the industry.”
Founder of Drive Yello
The startup scene in Sydney is very active, diverse, and exciting to be a part of, says Fanale, founder of Yello, a driver-booking platform. But he added that the scene is still maturing.
“Maybe we’re at the tail end of the terrible teens,” Fanale jokes. “Access to grants, tax incentives, and the legislation around options and employee salary packages are improving, but there is still a long way to go, and investor appetite for early stage startups is lower.”
It can be tough to get funding if you’re a young startup, Fanale says.
“This needs to change if we are going to get the next Uber, Facebook, or Google to come out of Australia,” Fanale says. “The only way I see this changing in the short-term is if government support drastically increases or we get more international investors interested in Australian startups.”
Co-founder of Simpla
Sydney’s startup scene is burgeoning, says King, co-founder of Simpla, a drop-in content management system. In the last few years, Sydney’s startups have not only ventured outside of the country, but also into outer space.
“We’re in an accelerator called Muru-D, and just in our cohort of 10, there are teams sending satellites to space, building autonomous underwater drones and next-gen Internet of Things platforms,” King says.
Startups in Sydney are the real deal, says Tan, co-founder of Pocketbook, a personal finance app. Tan says corporations are starting to channel support to startups.
“I think what’s really exciting is that now today, the experienced professional working for a startup is more on the map than ever,” Tan says. “It’s no longer seen as a career-break, but rather a career-builder.”
Founder of Bugcrowd
Ellis, founder of Bugcrowd, a crowdsourced securities platform, says he started his business in Sydney and then moved to San Francisco in order to grown more quickly. The Aussie in him gave him the itch to take his startup idea onto a global playing field.
“The phrase that jumps to mind is ‘straining at the bit,’” Ellis says. “You think about a horse that you have tethered, and it wants to go for a run. Australians are born and raised as troubleshooters. It’s very much part of our DNA.”
What’s unique about Australia’s startup culture—besides the influx of government funding to fuel startups and venture capitalists like Blackbird Ventures and Square Peg Capital—is the camaraderie of the entrepreneurial community.
“In Australian culture, we’re in it to support each other and the whole concept of ‘mateship,’” Ellis says. “If we see opportunity to help, and if we have the intelligence and tools to help, we’ll jump in to help. That culture is critical in startups because you’re doing things you’ve never done before.”