Melbourne Tech City
Melbourne. Australia's Tech City
Global studies published by Deloitte, The Economist Intelligence Unit and AT Kearney establish Melbourne as Australia's leading tech city.
An innovative and tech ready city
Melbourne is the only Australian city and one of five in the Asia Pacific region to be included in Savill’s global study, Tech Cities 2017.1 Melbourne was evaluated across a wide range of criteria such as business and tech environments, talent pool, property costs and scored particularly highly for city buzz and wellness. At a lifestyle level ‘Savill’s Flat White Index’, a measure of the ability to get a good coffee in a socially vibey café, puts Melbourne third in the world (and is one of the factors that makes Melbourne one of the most liveable cities in the world).
In the 2017 Smart Cities Index2, Melbourne is ranked 10th of the 97 cities surveyed. Of particular note is the top 10 positioning Melbourne occupies for 4G LTE Internet speed (1st); Smartphone penetration (5th equal) and Urban Planning (4th equal).
Headquarters for a tech savvy market
In their 2018 report, Preparing for disruption3, The Economist Intelligence Unit provides an assessment of how well prepared countries are for technological change across a number of criteria such as: internet and mobile phone subscriptions, e-commerce, e-government, cyber-security, research and development and innovation. For the period 2013-17, Australia ranked third.The report also provides an estimate for 2018-2022. For this period Australia shares top position with Singapore and Sweden.
A lively and growing digital economy
The tech sector in Melbourne employs 85,000 people in around 8,000 companies and generates approximately A$35 billion annually. Deloitte estimates that by 2020 Melbourne’s digital economy could be worth more A$50.8 billion, an increase of 45%. Melbourne is home to a number of global businesses that grew out of the 1990’s ‘dotcom boom'.
Realestate.com.au, Seek.com.au and Carsales.com.au are all now valued at more than $2 billion each. The city is also home to several exciting startups that are taking on global markets while making their presence felt domestically. Examples include Culture Amp, Airwallex, Envato, AuctionFox, Redbubble, Tribe and Vinomofo.
A vibrant startup ecosystem
Melbourne has raced through the activation phase of the ecosystem lifecycle, creating scores of accelerators, coworking spaces, and other startup support organisations. The state government, through LaunchVic, has committed A$85million to building this support infrastructure for startups.
Fundraising levels for Australian venture capital funds reached a record level in 2016, with $78 million invested in 20 Victorian headquartered companies. Melbourne’s startup ecosystem is leading Australia in generating a new foundation for economic prosperity. Melbourne’s rate of early stage funding is the 5th fastest in the world.
With around 1,100 tech startups, Melbourne has about twice the average for other ecosystems at a similar developmental stage. Melbourne ranks in the top five for the world's strongest early stage growth, and has outpaced the average among comparably sized activation-phase ecosystems.
Knowledge based jobs, of which startups are a key contributor, have grown by 25 per cent or 60,000 jobs across the inner city in the past decade.
With Oracle’s recent purchase of Aconex, Melbourne has produced five technology exits worth over US$100million in the last five years. Examples include:
- Spinifex Pharma was acquired in 2015 by Novartis for $200million (plus potential $500million, in milestone payments)
- TouchCorp founded in 2000, went public in 2015 at $143million and then merged with Afterpay in 2017
- RedBubble founded in 2006 went public in 2016 at $225million
- Aconex founded in 2000, IPO in 2014 and acquired by Oracle in 2017 for $1.2 billion.
What to do now
Start a conversation with our investment team about the potential of Australia's tech city for your company and to learn more about how we can help you at each step of the way.
1. Savills Tech Cities 2017
2. EasyPark, Smart Cities Index 2017
3. Economist Intelligence Unit, Preparing for Disruption 2018