Australia might have been hit harder than most by the events of 2020 and 2021, but if so, it was a situation of its own making, brought about by incredibly strict and uncompromising controls. We’ll save the debate over the rights and wrongs of that for another day, but one thing is clear – the nation has also enjoyed a swifter economic recovery than everyone else and is attracting the attention of investors the world over.
Even more interesting, these are not just those looking to invest in what might be seen as reasonably safe havens like mining. While the rest of the world’s back was turned, something remarkable has happened to Australia’s tech sector, to the extent that it is now the third largest contributor to GDP.
Unemployment at a record low
While the rest of the world continues to battle against recession with rising interest rates and inflation ballooning out of control, Australia’s economy is in rude health and unemployment levels have bottomed out to a 50-year low.
Tech sector sits at the heart of the success story, with businesses making exciting advances in areas as diverse as gaming, fintech and cleantech.
Big name investors are choosing Australia
Global tech giants have been falling over one another to get a piece of the action. Examples include SoftBank, the Japanese tech giant, which acquired Australian AI and robotics firm ST Solutions. This is the company behind Pepper, one of the most exciting and successful robots on the market.
Perhaps the highest-profile investor of them all, however, is Google. The company chose Canberra as the literal launchpad for Wing, its first ever commercial drone delivery service. Customers place orders via a mobile app to have food, drink and retail purchases delivered to their door by drone. Wing, however, is only one of Google’s Australian initiatives. The company plans to invest a further AU$1 billion over the next three years including the creation of a regional research hub in Sydney.
Sundar Pichai, Google’s CEO, says Australia is ideally positioned to “help lead the world’s next wave of innovation, harnessing technology to improve lives, create jobs, and make progress.”
Australia’s unicorns are attracting international attention
It’s not all about multinational giants moving Down Under and creating opportunities, however. Australia’s own tech startups can take responsibility for creating the environment of technological innovation, without which the Googles and SoftBanks of this world would not have given the market a second look. These include eight tech unicorns as at January 2023 according to data from CB Insights. These are mostly in the fintech sector and have a combined value in excess of US$54 billion.
Naturally, these highly successful and high-value startups have caught the attention of some big name venture capital companies, including Blackbird Ventures, Sequoia Capital China, and Index Ventures to name just three.
But businesses don’t have to be worth 10 figures to make a difference. There is a groundswell of more modest startups that are collectively just as important to the ongoing success of Australia’s tech industry.
From fintech to igaming – key sectors driving Australia’s tech industry
The technological ecosystem in Australia is driven by businesses exploring the cutting edge in a number of core sectors. These include fintech, gaming, cleantech and healthtech. Let’s take a brief look at each in turn.
Fintech is maturing and scaling
Deloitte recently described Australia’s fintech sector as “ripe for investment,” reporting that it is both maturing and scaling at an impressive pace. The company picked out a couple of retail credit firms as rising stars, including Zip, which offers “buy now-pay later” services and Driva, which specializes in car loans.
Gaming – an eSport market leader
Several of the most prominent ASX-listed eSport teams are Australia-based. These include Mogul Games, Emerge Gaming, PlaySide Studios and iCandy Interactive. Last September, the country also hosted its first ever DreamHack eSports festival.
Healthtech – from cannatech to software
Australia’s fastest growing tech firm of 2022 was Montu, a cannatech medical platform. Four other top ten companies are in the healthtech niche, ranging from AirPhysio, which manufactures medical devices to Fresh Clinics, a company specializing in software solutions for the cosmetic health sector.
Cleantech – taking strides in renewables
Renewable energy technology is of vital global importance, and once again, Australian tech firms are leading the way. Queensland-based Genex Power commenced construction of its 250 megawatt hydro project in 2021, which is of target for completion next year. Meanwhile, the Melbourne Renewable Energy Project is championing wind power projects and has created almost 150 new jobs.
iGaming – an exceptional opportunity for offshore casino providers
We mentioned gaming earlier in the context of eSport. But Australia is mostly famous for its love affair with pokies – that’s casino slots to the rest of the world. In 2020/21 Australians went online in record numbers as land-based facilities closed their doors.
Regulatory restrictions prevent domestic casinos from operating online, but this has created exceptional opportunities for offshore providers. You can click here to see some of the online casino brands that have rapidly moved in on the Australia market to provide pokies and other casino games.