“The next Silicon Valley” is a phase that has been attributed to hundreds of different places around the world, from New York to Shenzen.

Envious of the San Francisco Bay Area’s tech ecosystem, Australian startups have began to emerge within the major capital cities. It is encouraging to them that some US-based firms, including in Silicon Valley, have ventured Down Under.

This author, a guest of Pitt Street Research’s Semiconducter Conference last week, heard the boss of one such company (chip-building play Revasum (ASX: RVS)) Jerry Cutini declare to the audience: “We didn’t come [to the ASX] by accident, we came on purpose because we thought it was the right market.”

But where in Australia are the tech firms? Stockhead analysis has found all five mainland Australian states had listed technology companies.

Of course, listing is not to say they’ve “made it”, because many are still living off capital raises.

Australia has its fair share of tech companies and they have had a positive year in 2019 – they’re up 9 per cent. But some states have better performing tech sectors than others.

The winners

The tech sectors of New South Wales and Victoria have led the way, gaining 17.8 per cent and 13.7 per cent respectively. Both these states have vibrant tech sectors that in recent months have seen significant activity, from US firms setting up shop, to state governments become involved.

In August last year, the NSW government announced a new tech precinct in the Central to Eveleigh area. Premier Gladys Berejiklian said it would “cement Sydney as the technology capital of Australia and create more secure jobs.”

Getting involved was one of Australia’s success stories, the US-listed Atlassian, which agreed to set up in the new precinct.

It is anticipated 10,000 new jobs will be created in the precinct by 2036.

Sydney already has a vibrant sector – the largest tech firms, such as Amazon and Google, are in the Harbour City. Additionally, three of the so-called WAAAX stocks – Wisetech, Appen and Xero; are present as well. But there are also hundreds of startups and Sydney has the highest concentration of any city.

But the rivalry between Australia’s two largest cities extends to the tech race as well. In Melbourne, the inner city suburb of Cremorne has been touted as Australia’s – wait for it – “Silicon Valley”.

When direct flights between Melbourne and San Francisco were launched by Qantas last September, both the Victorian government and Qantas made no secret they believed the two were close, and these new flights would make them closer.

At the same time, the state government launched an advertising campaign to run in San Francisco – ‘Melbourne Tech City’.

“This campaign is all about raising our profile as a global tech hub with a culture of innovation and an incredible talent pool,” said trade minister Philip Dalidakis.

In addition to being the home of home-grown MYOB and SEEK, Melbourne hosts the local office of workplace messaging app Slack, expected to go public in the US later this year.

While New South Wales’ small cap tech stocks have performed slightly better than Victoria this year, both states have had solid shares and their fair share of top performers.

Here is a list of all NSW and Victorian-based ASX IT small caps…

CodeNamePrice (3.30pm 20 May)Return YTD (%)State of DomicileMarket Cap
HIL HILLS LTD0.15-12NSW34797828
EOL ENERGY ONE LTD1.7567NSW37290204
CRO CIRRALTO LTD0.009-35NSW5942319.5
NET NETLINKZ LTD0.082156NSW118608744
CWL CHANT WEST HOLDINGS LTD0.069NSW7435428
MNW MINT PAYMENTS LTD0.027-10NSW21988496
JCS JCURVE SOLUTIONS LTD0.037-8NSW12458562
RKN RECKON LTD0.61-9NSW69109848
TZL TZ LTD0.15-21NSW12700469
RHP RHIPE LTD2.4698NSW327999872
HSC HOMESTAY CARE LTD0.02-44NSW13899986
OCL OBJECTIVE CORPORATION LTD2.808NSW260100512
KKL KOLLAKORN CORP LTD0.0090NSW1887994.75
FGO FLAMINGO AI LTD0.006-67NSW6720766
JXT JAXSTA LTD0.2847NSW65928168
SGO STREAM GROUP LTD0.013-32NSW2851287
ESV ESERVGLOBAL LTD0.09620NSW116241664
EVS ENVIROSUITE LTD0.14106NSW53679404
KTE K2 ENERGY LTD0.005-17NSW1503285.75
MOQ MOQ LTD0.20-13NSW32264140
MBM MOBECOM LTD0.07-33NSW17718316
BLG BLUGLASS LTD0.165-13NSW64856196
IRI INTEGRATED RESEARCH LTD2.4943NSW427933280
JAN JANISON EDUCATION GROUP LTD0.33-17NSW55672776
TBL TAMBLA LTD0.01-9NSW9896918
SLX SILEX SYSTEMS LTD0.37106NSW63925252
FCT FIRSTWAVE CLOUD TECHNOLOGY L0.2546NSW73009480
IP1 INTEGRATED PAYMENT TECHNOLOG0.012-16NSW2932588.25
GSW GETSWIFT LTD0.17-59NSW30163890
BTH BIGTINCAN HOLDINGS LTD0.575120NSW148164208
ELO ELMO SOFTWARE LTD6.9528NSW416069568
AD8 AUDINATE GROUP LTD7.21109NSW436504832
NTC NETCOMM WIRELESS LTD1.0944NSW160231248
COO CORUM GROUP LTD0.026-16NSW6660357.5
CL1 CLASS LTD1.6017NSW175316464
KYK KYCKR LTD0.047-30NSW7095350
RFN REFFIND LTD0.0060NSW3093000
ISD ISENTIA GROUP LTD0.25-11NSW50000000
8CO 8COMMON LTD0.185429NSW24078058
TTL TRANSCENDENCE TECHNOLOGIES L0.012-29NSW2084648
AMO AMBERTECH LTD0.10-31NSW3057318
IXU IXUP LTD0.085-23NSW14101494
SIS SIMBLE SOLUTIONS LTD0.039-53NSW4233181.5
ID8 IDENTITII LTD0.56-19NSW30530528
SRO SHAREROOT LTD0.002-25NSW1569454.375
YOJ YOJEE LTD0.12592VICTORIA93218400
SNS SENSEN NETWORKS LTD0.1117VICTORIA48133760
RXP RXP SERVICES LTD0.425-6VICTORIA68466304
IOD IODM LTD0.03163VICTORIA16967548
ARQ ARQ GROUP LTD1.75-8VICTORIA205870416
DWS DWS LTD0.925-20VICTORIA119307352
CGO CPT GLOBAL LIMITED0.146VICTORIA5248442
BCC BEAM COMMUNICATIONS HOLDINGS0.26547VICTORIA14011465
ADJ ADSLOT LTD0.027-34VICTORIA42876168
CXZ CONNEXION TELEMATICS LTD0.0120VICTORIA10141981
QTG Q TECHNOLOGY GROUP LTD0.00775VICTORIA1051443.125
VLT VAULT INTELLIGENCE LTD0.196VICTORIA20583404
DUB DUBBER CORP LTD0.96137VICTORIA166047696
SRH SAFEROADS HOLDINGS LTD0.23-29VICTORIA8372000
SEN SENETAS CORP LTD0.077-11VICTORIA82181040
PPS PRAEMIUM LTD0.375-41VICTORIA145902784
RDF REDFLEX HOLDINGS LTD0.40-5VICTORIA78113584
ADA ADACEL TECHNOLOGIES LTD0.663VICTORIA50705812
GOO GOOROO VENTURES LTD0.05318VICTORIA5831303.5
SE1 SENSERA LTD0.1050VICTORIA29654418
MOB MOBILICOM LTD/AUSTRALIA0.0953VICTORIA24922862
RD1 REGISTRY DIRECT LTD0.0433VICTORIA5171199.5
KNO KNOSYS LTD0.07526VICTORIA10599433
LVH LIVEHIRE LTD0.425-27VICTORIA132041152
TYM TYMLEZ GROUP LTD0.155-3VICTORIA20908796
UBN URBANISE.COM LTD0.035-12VICTORIA23887420
CAT CATAPULT GROUP INTERNATIONAL1.3373VICTORIA252936032
AVA AVA RISK GROUP LTD0.165-15VICTORIA33698492
BCT BLUECHIIP LTD0.07946VICTORIA44808788
HYD HYDRIX LTD0.03124VICTORIA20742828
CT1 CCP TECHNOLOGIES LTD0.0140VICTORIA4461670.5
CCG COMMSCHOICE GROUP LTD0.0747VICTORIA8504454
TGO TRIMANTIUM GROWTHOPS LTD0.65-19VICTORIA90376568
PYG PAYGROUP LTD0.70-13VICTORIA36170028
SMX SECURITY MATTERS LTD0.43547VICTORIA50558600

 

Stagnation

Queensland (1.5 per cent) and Western Australia (0.3 per cent) have had slower years, relatively speaking. But their state governments have been keen to diversify the economies beyond mining and invest in the tech-space.

Brisbane’s start up hub is ‘The Precinct’ and the government funded its recent expansion. Deputy Premier Jacqui Trad declared: “It’s investments like these that will create the jobs of the future here in Queensland.”

According to an Techboard report last year, Queensland has the second most startups behind Sydney and is growing faster than the Harbour City.

But tech companies have been slower to list. We only saw 14 listed small cap tech stocks in Queensland and while the sector is only up 1.5 per cent, they have had some solid performers, led by IT services group GBST Holdings (ASX: GBT), which has gained 79 per cent.

Western Australia has just under 40 and like Queensland, a fair share of performers. Cirrus Networks (ASX: CNW) and CV Check (ASX: CV1) have both more than doubled this year. 

The West Australian government has been less involved in trying to grow the tech scene at home compared to other state governments.

But there is a vibrant sector over there and it’s not just autonomous vehicles at mines or non-Western companies believing they need an office that’s still Australian but in sync with most of the Asia-Pacific.

Between 2012 and 2017, YResearch found the tech sector grew by 43 per cent. The one that would spring to everyone’s mind is robotics company FBR (ASX: FBR), based very close to Perth Airport.

It’s trying to build houses with robots and recently signed a critical joint-venture with BrickWorks to provide the bricks in FBR’s ‘Wall-as-a-Service’ offering.

CodeNamePrice (3.30pm 20 May)Return YTD (%)State of DomicileMarket Cap
GBT GBST HOLDINGS LTD2.6979Queensland183363776
IME IMEXHS LTD0.0444Queensland33323658
CLT CELLNET GROUP LTD0.25-36Queensland15648774
DTL DATA#3 LTD1.7822Queensland272535648
3DP POINTERRA LTD0.0510Queensland23455040
MPW MSL SOLUTIONS LTD0.11-29Queensland28731642
RCW RIGHTCROWD LTD0.29-12Queensland57390484
NVX NOVONIX LTD0.5227Queensland62800216
OTW OVER THE WIRE HOLDINGS LTD5.1912Queensland263029664
TCN TECHNICHE LTD0.03-28Queensland5478702.5
OLV OTHERLEVELS HOLDINGS LIMITED0.02-19Queensland6310511
RUL RPMGLOBAL HOLDINGS LTD0.6-3Queensland129821520
CAG CAPE RANGE LTD0.85-48Queensland75292472
IHR INTELLIHR HOLDINGS LTD0.092Queensland12619371
DTI DTI GROUP LTD0.043Western Australia8829016
DCC DIGITALX LTD0.0857Western Australia42035880
DTZ DOTZ NANO LTD0.06-22Western Australia14180733
FAM FAMILY INSIGHTS GROUP LTD0.001-50Western Australia2077888.375
TV2 TV2U INTERNATIONAL LTD0.0120Western Australia11360541
CNW CIRRUS NETWORKS HOLDINGS LTD0.05194Western Australia40635668
BID BIDENERGY LTD0.8-27Western Australia86605752
EPD EMPIRED LTD0.28-31Western Australia44034980
PIL PEPPERMINT INNOVATION LTD0.01-19Western Australia12838572
IAM INTIGER GROUP LTD0.01-40Western Australia11745271
SKF SKYFII LTD0.1919Western Australia60051972
4DS 4DS MEMORY LTD0.0729Western Australia72796240
LNU LINIUS TECHNOLOGIES LTD0.03-41Western Australia29341508
AO1 ASSETOWL LTD0.01-54Western Australia893850.6875
NUH NUHEARA LTD0.073Western Australia68754720
BRN BRAINCHIP HOLDINGS LTD0.04-60Western Australia45142840
K2F K2FLY LTD0.12-14Western Australia9042497
SYT SYNTONIC LTD0.004-33Western Australia14663910
SMN STRUCTURAL MONITORING-CDI0.79-27Western Australia90598504
ODA ORCODA LTD0.08-59Western Australia8158082.5
LVT LIVETILES LTD0.4130Western Australia274620032
QFY QUANTIFY TECHNOLOGY HOLDINGS0.0117Western Australia7799925.5
TSN TRANSACTION SOLUTIONS INTERN0.010Western Australia16886806
DSE DROPSUITE LTD0.0331Western Australia15797777
DN8 DREAMSCAPE NETWORKS LTD0.1475Western Australia55410648
SVT SERVTECH GLOBAL HOLDINGS LTD0.0278Western Australia10002747
ELS ELSIGHT LTD0.66-6Western Australia63286476
SP3 SPECTUR LTD0.193Western Australia10684769
MYQ MYFIZIQ LTD0.25-21Western Australia22039030
CV1 CV CHECK LTD0.12140Western Australia32757328
SM8 SMART MARINE SYSTEMS LTD0.0236Western Australia4963728
FZO FAMILY ZONE CYBER SAFETY LTD0.14-40Western Australia28087896
WBT WEEBIT NANO LTD0.59-16Western Australia37552704
CIO CONNECTED IO LTD0.002-33Western Australia3626170
DXN DATA EXCHANGE NETWORK LTD/TH0.06-53Western Australia20231216
NVU NANOVEU LTD0.08-9Western Australia9939765
SCL SCHROLE GROUP LTD0.01-47Western Australia6300962
NOR NORWOOD SYSTEMS LTD0.004-30Western Australia5460801.5
FBRFBR LTD0.085-15Western Australia$119,310,000

 

The laggard

Traditional manufacturing state, South Australia, has lagged behind (losing 24 per cent).

This is not to suggest the Festival State is still stuck in the days of car-making. Since being elected last year, Premier Steven Marshall has tried to position his state as a tech magnet, launching a $28 million fund for entrepreneurs and starting a start up hub – FIXE at Lot Fourteen.

Marshall has stated publicly he wants South Australia to have the highest rate of startups in Australia. He even appointed a ‘Chief Entrepreneur’ – Jim Whalley, the co-founder of defence industry company Nova Systems.

But this year South Australia’s three listed startups are all down – Xped (ASX: XPE), Buddy Technologies (ASX: BUD) and Prophecy International (ASX: PRO).

TickerNamePrice (3.30pm 20 May)Return YTD (%)State of DomicileMarket Cap
XPE XPED LTD0.002-20South Australia3013661.5
BUD BUDDY TECHNOLOGIES LTD0.06-38South Australia104594688
PRO PROPHECY INTERNATIONAL HOLDINGS0.26-13South Australia16322495