The Australian Tech Start Up Scene. A New Story Unfolds.



When you launch a new app or social media platform, it’s a bit like sending a new star into the sky. Some burn really brightly for a brief period of time. A few remain there for decades, seeming to grow in intensity. Whilst others, simply blink out of the sky suddenly never to be seen again.

In the Australian landscape we have seen some remarkable tech startup success stories such as CliniCloud, the medtech start up, and the remarkable story behind Atlassian.

At the moment though, it’s the US, Irish (well, maybe for not long now after Apple) and Israeli skies that are being set alight with new stars. So, what does the Australian tech start up environment look like, particularly after an injection of $1.1 billion by the federal government into innovation and science?

Well, it’s a bit blurry.

The financial investment has primarily been allocated for research. There has been approximately  $586 million allocated for  scientific research over the next four years. The criticism has been, that many tech startups don’t use university research to bring an app, platform or device to market. Not only that, but that a proliferation of research and IP does not make for an innovative, dynamic fast moving tech startup environment. If Australia is to succeed globally, it needs to have investment in tech talent and business mindsets as well as intellectual property. Without it, there will be a lot of data out there without the skills to bring it into its full potential.

Currently, when you explore the scope of relevant grants available at both a state and federal level,  there is a focus on telemedicine, cybersecurity and government departmental assistance*. In particular, being able to aid the various government departments in utilising technology to collate, sort and and make better use of their data. There are also grants that concentrate on specific departments like environment and defence. For example, there is a federal carbon capture and storage grant. There is no doubt that the research and IP components requested by government seed funding will be vital for Australia’s success in these fields. Appfactory is passionate about areas of telehealth, accessibility and safety and the benefits they can bring people. Research funding is an important part of innovation in these fields.

The national focus on telehealth has certainly been highlighted with the federal government allocating $250 million over four years as part of a $500 million biomedical fund with the private sector. It’s aimed at making Australia a leader in biomedical innovations- a large proportion of which may well be technology based.*  Capital injection will certainly see tech startups beginning to focus on key areas like telemedicine. The current 34%* of startups who applied for grants from the government as a source of seed funding in 2015 may well begin to increase.

Yet, there is a large proportion of tech startups who do not apply for grants, but seek private investment.  In fact, 60% of funding for Australian startups comes from private investment*. The government has allocated a 20% tax benefit for early investors in its ESIC (early stage innovation company) program. It also gives an exemption from capital gains tax in their new policy. Yet, this is hardly enough, if we are to truly address the current gaps of tech talent, the speed to market that it takes to launch a research backed startup and the financial restrictions that encourage entrepreneurs to set up and then stay in Australia.

There are people like Darren Tonkin who are a prime example of what can be achieved with a focus in this area. Enthusiastic traveller and engineer, Darren Tonkin, created Storyboard Social . A social media platform that allows you to share your travel stories and memories through photos, captions and movies. He did not have a government grant. He did have access to fabulous mentors and technical expertise. The entrepreneur used a digital hub and university startup group to help incubate and bring his idea into being and backed himself financially with his own hard earned cash. Appfactory worked with him to create the iOS and Android apps for the platform. This is just the promising beginning for Storyboard Social.

I think though, that if the likes of Darren Tonkin are going to continue flourish in Australia we need to encourage investment in talent, further tax incentives for employees in tech startups and find ways to harness all this investment in research so that it is brought to market with speed, proficiency and in a business model that will set the global skies alight with it’s innovation. There is no doubt that we are operating in an exciting time in Australia’s digital history. What do you think we need to do to support tech startups in Australia?



*2015 Startup Muster survey