Melbourne tech attracting US interest

Melbourne is fast establishing itself as Australia’s Tech City. With an impressive stable of home grown start-ups and a growing number of U.S. big names, Melbourne has reached a critical mass in its ecosystem that has now also begun attracting the attention of venture capital.

Melbourne is the fastest growing city in Australia. It’s projected to overtake Sydney to become the largest city by 2030, and offers the biggest opportunities for launch and growth, says Philip Dalidakis, Minister for Innovation and the Digital Economy for the State of Victoria. Its reputation combined with its status as one of the world’s most livable cities makes is making it a magnet for tech professionals.

Melbourne is home to a wealth of tech talent

The attraction of international talent is only half the story. Melbourne is also home to Australia’s highest ranked university and is producing more tech graduates than anywhere else in the country. This ready supply of talent is proving a huge driver in why U.S. companies are heading there to set up their Asia-Pacific headquarters.

In 2016, payments company Square took Melbourne up on their expansion proposition when the company opened its first Australian office there. Since then, business has ramped up in a growing Australian market — the number of Australian businesses using Square has increased by 150 percent since March 2017. The company’s local headcount will exceed 100 employees over the next few years as it invests in the local workforce and adds its first international engineering lab.

Square joins a wide swath of major tech companies expanding into Australian territory, including Apple, IBM, Slack, and Google, as well as a growing array of startup firms looking for that sweet international funding. In fact, funding levels for Australian venture capital funds reached a record level in 2016, with $78 million invested in 20 Melbourne-headquartered companies.

Going global from Melbourne

The next wave of Melbourne tech companies are also taking on global markets while making inroads domestically, including Airwallex, Culture Amp, Envato, AuctionFox, Rome2rio, 99Designs, and more.

In fact, this global ambition is a large part of how Airwallex came to attract the second-largest financing deal for an Australian startup in history. The round was led by existing investors Tencent, the $500 billion Chinese internet giant, and Sequoia China. Other participants included China’s Hillhouse, Horizons Ventures — the fund from Hong Kong’s richest man, Li Ka-Shing — Indonesia-based Central Capital Ventura (BCA), and Australia’s Square Peg, a firm from Paul Bassat, who took recruitment firm Seek to IPO and is one of Australia’s highest-profile founders.

Source: VentureBeat