A new report, entitled Startups in Perth Unwrapped, by startup talent and growth firm, Think & Grow has unveiled insights into Perth’s bustling startup ecosystem, putting a spotlight on some of the city’s leading startup founders.
The report highlighted a gap in funding for female-led businesses and positioned WA as Australia’s fourth highest funding state in 2020, having raised a total of $270 million last year.
The western seaboard follows NSW, VIC and Queensland in total funding raised in 2020.
Additionally, private funding proved to be a challenge for Perth’s start-ups due to a combination of factors, including difficulties in identifying private funding sources and an overall lack of capital being funneled into the tech and startup ecosystem.
Other key findings from the report include
Funding trends in WA are inconsistent with national patterns
WA startups are going into public markets much earlier than their counterparts in other states. National trends reveal that a majority of startups are seeking private funding.
Female founders are being placed on the backburner
Female-led startups were raising an average of $320K per funding round in comparison to an average of $1.2 million per funding round for mixed or male-led teams.
This is also coupled with concerning figures, which reveal that men are funded four times more often than women and with raises that are three times larger than women.
Some sectors are attracting more funding than others
In 2020, the top sectors for funding were
- Health & biotech
- Safety & security
- Engineering & construction
Despite the challenges, the report has found Perth is primed for a boost in innovation. The city boasts a tight-knit and supportive community and ample opportunities for expansion.
Jonathan Jeffries, Co-founder and Partner at Think and Grow said that despite being the underdog, Perth has all of the characteristics of the ideal launch pad for Australian start-ups.
“Having opened our doors in Perth in March of 2020, we have found its position unique compared to our other locations around the world.”
“In many ways, the state’s major industries and the innovations that have been born out of these sectors – for example to solve mining problems – primes the region for success.”
“However this hasn’t led to great amounts of success as yet. Geographically, Perth shares its time zone with over 50% of the world’s population making global collaboration seamless.”
“Yet this is untapped in many ways and it certainly should be a bigger draw card to Australian and New Zealand businesses seeking to expand their global footprints,” said Jonathan Jeffries.
“As it stands, the ecosystem is facing some pressing issues – namely, funding and talent roadblocks. The solutions are clear, yet challenging.”
“For WA startups to flourish, they need to continue to offer flexible working arrangements and broaden their horizons by hiring remote workers in talent hubs across Australia and globally.”
“Once we see a few more success stories begin to pop-up, Perth’s startup community will firmly position itself as a thriving ecosystem, which will inherently open up streams of funding into the region’s startup sector,” said Jonathan Jeffries.
“This will incentivise the quality talent that already exists in the region to stay and grow with the city and its bustling community and enable future unicorns, like Canva, to stay put.”
Venture Capital funds missing huge opportunities
Peter van Bruchem,Co-founder at Techboard said the lack of investment into the startup and tech sectors in the region is impeding the potential for Perth’s startup community.
“WA startups have historically used the ASX as a primary source of funding and as a substitute for Venture Capital due to the lack of local actively investing VC funds.”
“The ASX has changed its rules with the effect that it is less possible for early stage pre-revenue companies to list on the ASX with the result being that the companies getting funding on the ASX are getting progressively more mature and later stage,”
“There has not been a sufficient increase in private investment from VC firms , Corporates or High net worths to offset the lack of available funding via the ASX.” said van Bruchem.
The city’s founders are calling for greater government support and investment into the Startup community as Perth’s world-class talent are being lured away by opportunities overseas.
Many believe that more emphasis needs to be placed on developing education and support systems for budding talent, providing more avenues for funding and growing connections for mentorship opportunities for early-stage founders.