When comes to venture capital, where do you think will be the venture capital city in Australia? You may think of Sydney and Melbourne straight away? What about Queensland and Western Australia?
Of course, Sydney is still the major financial capital city for Australia, Melbourne maybe catching up, but in terms of the number of venture capital firms and IT firms, Sydney still leads Melbourne at present.
Melbourne, however, is fully aware of these gaps, and has been developing niche industries supporting technology and biotechnology companies to relocate to Victoria.
The venture capital firms in Sydney primarily invest in IT, Telecommunications, biotechnology, some also invest in traditional industries such as retail, financial services.
In addition, Sydney seems to be the hub for infrastructure financing as well, mainly because Macquarie Bank is also headquartered in Sydney; which has a significant stake in Australia’s venture capital & infrastructure financing industry; other major players such as Challenger, Westpac, AMP are also headquartered in Sydney.
Melbourne ranks No.2 in terms of number of venture capital firms in Australia, it has a rather different venture capital industry compared to Sydney. The firms over there have been more active in the traditional industries such as retail, one company is Premier Investments headed by Solomon Lew, which invest in retail businesses exclusively, as well as the Myer family as another example.
The Victorian Government has also been quite supportive in promoting and attracting technology companies into Victoria, to some extent, it has been winning a large number of companies from NSW, especially in the nanotechnology and biotechnology sectors.
Over the past 5 years, the wealth in Western Australia had initiated interests for many Western Australians to establish new venture capital and corporate advisory firms. Initially, as you would have expected, these are mainly mining & resources related opportunities, but there has been a significant growth in the IT and biotechnology, as well as property development activities.
Perth is also within 4 hours distance from Singapore and Malaysia, and has formed good business relationships with SE Asian economies, sometimes even more so with other Australian States.
Brisbane / Gold Coast Area:
The Brisbane / Gold Coast area has been traditionally, a very strong property market, but Queensland in general, still lacking major financial institutions and corporate advisory firms. There is only a handful of stockbroking firms based in Queensland, that said, firms like ABN Amro Morgans and Wilson HTM had been very successful in supporting small to medium sized corporations (usually listed), successful IT companies such as RP Data, or franchises such as Flight Center had demonstrated “Queensland Entrepreneurship” is rising.
When comes to venture capital investments, investors should look into Queensland Government related venture capital firms and grants, there are specific technology parks established in Gold Coast for software developers for instance, and also several Government and University backed venture capital firms are also based in Queensland.
Aussie companies, however, should definitely look beyond Australia for capital raising ‘” while there are a lot of good talent in Australia, Australia is simply too small (population wise), and a lot of industries have disappeared, which have also resulted in lost in skills and opportunities ‘” 2 examples are aviation & defence industry, where Australia used to have the only air-craft carrier in the region; and its semiconductors industry, where it had lost a lot of good Australian-graduated engineers to Asia and US.
We will look into more such industries and trends in our future articles.
Australian Capital Providers Guide is now available from http://researchwhitepaper.com