Canva, a Sydney software startup founded in 2012, raised a round of venture funding in 2018 which valued it at US$1 billion. Canva’s 2018 raise catapulted it into the ‘unicorn’ category of private tech companies with valuations greater than US$1 billion. It has since raised two more rounds of funding and is now worth more than US$3 billion.
Canva’s entry into the ‘unicorn club’ was followed in March 2019 by Airwallex when the Melbourne-based fintech startup raised US$100m at a valuation over US$1 billion. Airwallex was founded in 2015. Hot on their heels was Judo Bank, a Sydney-based neo bank which raised $400m in July 2019 at a valuation of just over US$1 billion. Melbourne startup Culture Amp (2009) raised A$120m in September 2019 at a valuation of more than A$1 billion. The trajectory of businesses like Envato (founded in Melbourne in 2006), SafetyCulture (Townsville, 2004), Airtasker (Sydney, 2012) and Deputy (Sydney, 2008) makes it likely that these billion-dollar Australian startups will soon be joined by more peers.
Australia also has an array of young publicly-listed tech firms that have performed exceptionally well in recent years. Xero (ASX: XRO), which is dual-listed on the ASX and NZX, has shot to more than 15 times its initial price since it first listed on the ASX in 2012. Wisetech Global (ASX: WTC) has grown its value eight-fold since its listing in April 2016. And AfterPay Touch (ASX: APT) has seen a meteoric rise in value, with the stock now worth almost 30 times as much as when it listed in May 2016 (Figure 3).
This selection of companies is indicative of a broader trend for publicly- listed tech stocks in Australia. The ASX Information Technology Sector index (a grouping of tech firms) has, since mid-2017, begun to significantly outperform the ASX200 (Figure 4). The performance gap is marked and is continuing to widen.
The rate at which these high-value Australian companies are emerging has increased markedly in recent years as the fundamentals that underpin rapid growth for technology businesses have improved. As they recycle talent and capital back into the system we are likely to see that pace of growth continue to increase. Removing obstacles to these businesses remaining in Australia is therefore critical.