Big deals show how tech is reshaping Australia’s economy

The scale of recent Australian tech deals shows the power the start-up sector has to create wealth and jobs, as written in the AFR.

Over the past couple of weeks, there have been more than $10 billion worth of deals for local technology companies.

These include the billion-dollar-plus acquisitions of Melbourne-based A Cloud Guru and MessageMedia, the second and third largest acquisitions respectively in the Australian tech sector.

The scale of these companies shows the power the start-up sector has to create wealth and jobs.

And while it often seems that these massive companies appear from nowhere, almost overnight, the reality is that for founders, it is a long journey with a lot of hard work. Successful start-ups not only create wealth for their founders and investors but also build deep capability in our technology and venture capital ecosystem.

Furthermore, experienced founders often invest their time and capital back into the ecosystem in a virtuous cycle, critical to supporting the next wave of start-ups.

Great examples of this in Australia are Paul Bassat, co-founder of SEEK who now drives venture capital firm Square Peg, which is supporting dozens of the best Australian start-ups, and founder of MYOB Craig Winkler, who invested in and helped build Xero into the powerhouse it is today.

This knowledge transfer isn’t just limited to founders. In fact, many employees of successful start-ups go on to apply their skills and experience in other fast-growing companies. Start-ups are job multipliers, and create well-paid jobs much faster than other sectors. This was the case at Aconex – the start-up I founded in 2000 with Rob Phillpot – where many Aconex people have gone on to key roles in a dozen or so technology companies including MessageMedia, Buildxact and Vendor Panel.

This is the true value of a start-up ecosystem. A reinforcing process, that builds over time, to create more companies and more jobs.

Entrepreneurs need talent and expertise to scale up their company, and not just programmers. We know from previous research that for every tech job that start-ups create, an additional five roles are created in non-technical areas.

Start-ups are job multipliers, and create well-paid jobs much faster than other sectors. As our combined talent expands, Victoria and Australia can seed and develop an increasing number of home-grown global technology companies, creating the jobs of the future that we so desperately need coming out of the COVID-19 pandemic.

We have an opportunity to accelerate start-ups, particularly at the early stage, where well-timed nudges can accumulate to dramatically speed up the start-up ecosystem flywheel. That’s at the core of LaunchVic, acting as a catalyst for early-stage start-ups and advocate for time-poor, busy founders building tomorrow’s billion-dollar companies. We’re leveraging hundreds of millions of dollars of private sector investment through the Victorian start-up Capital Fund, along with a multi-million Angel sidecar fund that co-invests in women-led early-stage start-ups.

We’re also supporting entrepreneurial talent development and backing angel investment networks.

With large Australian technology companies now a regular feature of wealth creation in this country, not to mention one of the few sectors that have remained relatively resilient during the pandemic, we are witnessing the dawning of a new age for our economy in a post-COVID world.