Commissioned by LaunchVic in collaboration with Startup Victoria and dandolopartners the report – titled Mapping Victoria’s Ecosystem – defines a startup as any business with high impact potential that uses disruptive innovation and addresses scalable markets. Of the 1600 plus firms that responded to the survey, 1137 met this definition.
Kate Cornick, CEO of LaunchVic said “We have never before had such a large sample size of Victorian startups, making the report an important asset for the sector. It is a useful tool for key decision makers in terms of better understanding the makeup of the Victorian startup ecosystem and how best to support it.”
- Three ‘unicorns’ have emerged in Victoria, more than any other state in Australia – namely, REA Group ($8.7bn), SEEK ($5.9bn) and com.au ($2.8bn).
- The state has a sophisticated and diverse mix of startups across a variety of industries, but results demonstrate particular strength in Health, Enterprise & Corporate Services, and Media & Entertainment. Significantly, startups and scaleups in the health sector create a disproportionately large number of jobs for the number of companies operating in the sector.
- Startups are successfully executing monetisation strategies early in their journey, with 60% revenue positive in their first year, rising to almost 80% by year two.
- The majority of firms (54%) have not considered their exit strategy or intend to remain private indefinitely. Of those intending to exit, just 10% are aiming for IPO and 36% are seeking an acquisition.
- One in three startups report being bootstrapped, even amongst firms in later stages of development. Amongst founders who have sought external investment, the average time frame for raising capital is five months, with the median amount raised from Angel investors being $250,000.
- More than two thirds of startups are exporting to key markets including the US and UK, as well as China and New Zealand.
- Three in five founders draw on advice from mentors, with one in four turning to mentors and advisors with experience working at startups valued at greater than $100 million.
- Approximately three quarters of all founders in Victoria are male; however, females are more likely than males to establish a startup past the age of 45. The average age of the typical founder is 36.
- The majority of founders (54%) are educated to a Graduate Diploma level or higher, and 50% have previously started another business.
- Two thirds of founders were born in Australia, but the majority of founders (56%) have one or more parents born outside Australia.
- 97% of Victoria’s startups are in Melbourne, with the top 10 locations for startups being: Richmond, South Melbourne, Prahran, St Kilda Road, Southbank, Collingwood, South Yarra, Docklands, St Kilda and Brunswick. After Melbourne, Geelong had the largest number of respondents.
- More than 20 startup accelerators operate in Victoria, and these will be joined by 6 new programmes within the next 12 months. Victoria also has 190 meetup groups specifically focused on startups and entrepreneurship, with a further 460 are focused more broadly on tech.