“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…

Code Name Price (3.30pm 20 May) Return YTD (%) State of Domicile Market Cap
HIL HILLS LTD 0.15 -12 NSW 34797828
EOL ENERGY ONE LTD 1.75 67 NSW 37290204
CRO CIRRALTO LTD 0.009 -35 NSW 5942319.5
NET NETLINKZ LTD 0.082 156 NSW 118608744
CWL CHANT WEST HOLDINGS LTD 0.06 9 NSW 7435428
MNW MINT PAYMENTS LTD 0.027 -10 NSW 21988496
JCS JCURVE SOLUTIONS LTD 0.037 -8 NSW 12458562
RKN RECKON LTD 0.61 -9 NSW 69109848
TZL TZ LTD 0.15 -21 NSW 12700469
RHP RHIPE LTD 2.46 98 NSW 327999872
HSC HOMESTAY CARE LTD 0.02 -44 NSW 13899986
OCL OBJECTIVE CORPORATION LTD 2.80 8 NSW 260100512
KKL KOLLAKORN CORP LTD 0.009 0 NSW 1887994.75
FGO FLAMINGO AI LTD 0.006 -67 NSW 6720766
JXT JAXSTA LTD 0.28 47 NSW 65928168
SGO STREAM GROUP LTD 0.013 -32 NSW 2851287
ESV ESERVGLOBAL LTD 0.096 20 NSW 116241664
EVS ENVIROSUITE LTD 0.14 106 NSW 53679404
KTE K2 ENERGY LTD 0.005 -17 NSW 1503285.75
MOQ MOQ LTD 0.20 -13 NSW 32264140
MBM MOBECOM LTD 0.07 -33 NSW 17718316
BLG BLUGLASS LTD 0.165 -13 NSW 64856196
IRI INTEGRATED RESEARCH LTD 2.49 43 NSW 427933280
JAN JANISON EDUCATION GROUP LTD 0.33 -17 NSW 55672776
TBL TAMBLA LTD 0.01 -9 NSW 9896918
SLX SILEX SYSTEMS LTD 0.37 106 NSW 63925252
FCT FIRSTWAVE CLOUD TECHNOLOGY L 0.25 46 NSW 73009480
IP1 INTEGRATED PAYMENT TECHNOLOG 0.012 -16 NSW 2932588.25
GSW GETSWIFT LTD 0.17 -59 NSW 30163890
BTH BIGTINCAN HOLDINGS LTD 0.575 120 NSW 148164208
ELO ELMO SOFTWARE LTD 6.95 28 NSW 416069568
AD8 AUDINATE GROUP LTD 7.21 109 NSW 436504832
NTC NETCOMM WIRELESS LTD 1.09 44 NSW 160231248
COO CORUM GROUP LTD 0.026 -16 NSW 6660357.5
CL1 CLASS LTD 1.60 17 NSW 175316464
KYK KYCKR LTD 0.047 -30 NSW 7095350
RFN REFFIND LTD 0.006 0 NSW 3093000
ISD ISENTIA GROUP LTD 0.25 -11 NSW 50000000
8CO 8COMMON LTD 0.185 429 NSW 24078058
TTL TRANSCENDENCE TECHNOLOGIES L 0.012 -29 NSW 2084648
AMO AMBERTECH LTD 0.10 -31 NSW 3057318
IXU IXUP LTD 0.085 -23 NSW 14101494
SIS SIMBLE SOLUTIONS LTD 0.039 -53 NSW 4233181.5
ID8 IDENTITII LTD 0.56 -19 NSW 30530528
SRO SHAREROOT LTD 0.002 -25 NSW 1569454.375
YOJ YOJEE LTD 0.125 92 VICTORIA 93218400
SNS SENSEN NETWORKS LTD 0.11 17 VICTORIA 48133760
RXP RXP SERVICES LTD 0.425 -6 VICTORIA 68466304
IOD IODM LTD 0.031 63 VICTORIA 16967548
ARQ ARQ GROUP LTD 1.75 -8 VICTORIA 205870416
DWS DWS LTD 0.925 -20 VICTORIA 119307352
CGO CPT GLOBAL LIMITED 0.14 6 VICTORIA 5248442
BCC BEAM COMMUNICATIONS HOLDINGS 0.265 47 VICTORIA 14011465
ADJ ADSLOT LTD 0.027 -34 VICTORIA 42876168
CXZ CONNEXION TELEMATICS LTD 0.012 0 VICTORIA 10141981
QTG Q TECHNOLOGY GROUP LTD 0.007 75 VICTORIA 1051443.125
VLT VAULT INTELLIGENCE LTD 0.19 6 VICTORIA 20583404
DUB DUBBER CORP LTD 0.96 137 VICTORIA 166047696
SRH SAFEROADS HOLDINGS LTD 0.23 -29 VICTORIA 8372000
SEN SENETAS CORP LTD 0.077 -11 VICTORIA 82181040
PPS PRAEMIUM LTD 0.375 -41 VICTORIA 145902784
RDF REDFLEX HOLDINGS LTD 0.40 -5 VICTORIA 78113584
ADA ADACEL TECHNOLOGIES LTD 0.66 3 VICTORIA 50705812
GOO GOOROO VENTURES LTD 0.053 18 VICTORIA 5831303.5
SE1 SENSERA LTD 0.105 0 VICTORIA 29654418
MOB MOBILICOM LTD/AUSTRALIA 0.095 3 VICTORIA 24922862
RD1 REGISTRY DIRECT LTD 0.04 33 VICTORIA 5171199.5
KNO KNOSYS LTD 0.075 26 VICTORIA 10599433
LVH LIVEHIRE LTD 0.425 -27 VICTORIA 132041152
TYM TYMLEZ GROUP LTD 0.155 -3 VICTORIA 20908796
UBN URBANISE.COM LTD 0.035 -12 VICTORIA 23887420
CAT CATAPULT GROUP INTERNATIONAL 1.33 73 VICTORIA 252936032
AVA AVA RISK GROUP LTD 0.165 -15 VICTORIA 33698492
BCT BLUECHIIP LTD 0.079 46 VICTORIA 44808788
HYD HYDRIX LTD 0.031 24 VICTORIA 20742828
CT1 CCP TECHNOLOGIES LTD 0.014 0 VICTORIA 4461670.5
CCG COMMSCHOICE GROUP LTD 0.074 7 VICTORIA 8504454
TGO TRIMANTIUM GROWTHOPS LTD 0.65 -19 VICTORIA 90376568
PYG PAYGROUP LTD 0.70 -13 VICTORIA 36170028
SMX SECURITY MATTERS LTD 0.435 47 VICTORIA 50558600

 

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.

Code Name Price (3.30pm 20 May) Return YTD (%) State of Domicile Market Cap
GBT GBST HOLDINGS LTD 2.69 79 Queensland 183363776
IME IMEXHS LTD 0.04 44 Queensland 33323658
CLT CELLNET GROUP LTD 0.25 -36 Queensland 15648774
DTL DATA#3 LTD 1.78 22 Queensland 272535648
3DP POINTERRA LTD 0.05 10 Queensland 23455040
MPW MSL SOLUTIONS LTD 0.11 -29 Queensland 28731642
RCW RIGHTCROWD LTD 0.29 -12 Queensland 57390484
NVX NOVONIX LTD 0.52 27 Queensland 62800216
OTW OVER THE WIRE HOLDINGS LTD 5.19 12 Queensland 263029664
TCN TECHNICHE LTD 0.03 -28 Queensland 5478702.5
OLV OTHERLEVELS HOLDINGS LIMITED 0.02 -19 Queensland 6310511
RUL RPMGLOBAL HOLDINGS LTD 0.6 -3 Queensland 129821520
CAG CAPE RANGE LTD 0.85 -48 Queensland 75292472
IHR INTELLIHR HOLDINGS LTD 0.09 2 Queensland 12619371
DTI DTI GROUP LTD 0.04 3 Western Australia 8829016
DCC DIGITALX LTD 0.08 57 Western Australia 42035880
DTZ DOTZ NANO LTD 0.06 -22 Western Australia 14180733
FAM FAMILY INSIGHTS GROUP LTD 0.001 -50 Western Australia 2077888.375
TV2 TV2U INTERNATIONAL LTD 0.01 20 Western Australia 11360541
CNW CIRRUS NETWORKS HOLDINGS LTD 0.05 194 Western Australia 40635668
BID BIDENERGY LTD 0.8 -27 Western Australia 86605752
EPD EMPIRED LTD 0.28 -31 Western Australia 44034980
PIL PEPPERMINT INNOVATION LTD 0.01 -19 Western Australia 12838572
IAM INTIGER GROUP LTD 0.01 -40 Western Australia 11745271
SKF SKYFII LTD 0.19 19 Western Australia 60051972
4DS 4DS MEMORY LTD 0.07 29 Western Australia 72796240
LNU LINIUS TECHNOLOGIES LTD 0.03 -41 Western Australia 29341508
AO1 ASSETOWL LTD 0.01 -54 Western Australia 893850.6875
NUH NUHEARA LTD 0.07 3 Western Australia 68754720
BRN BRAINCHIP HOLDINGS LTD 0.04 -60 Western Australia 45142840
K2F K2FLY LTD 0.12 -14 Western Australia 9042497
SYT SYNTONIC LTD 0.004 -33 Western Australia 14663910
SMN STRUCTURAL MONITORING-CDI 0.79 -27 Western Australia 90598504
ODA ORCODA LTD 0.08 -59 Western Australia 8158082.5
LVT LIVETILES LTD 0.41 30 Western Australia 274620032
QFY QUANTIFY TECHNOLOGY HOLDINGS 0.01 17 Western Australia 7799925.5
TSN TRANSACTION SOLUTIONS INTERN 0.01 0 Western Australia 16886806
DSE DROPSUITE LTD 0.03 31 Western Australia 15797777
DN8 DREAMSCAPE NETWORKS LTD 0.14 75 Western Australia 55410648
SVT SERVTECH GLOBAL HOLDINGS LTD 0.02 78 Western Australia 10002747
ELS ELSIGHT LTD 0.66 -6 Western Australia 63286476
SP3 SPECTUR LTD 0.19 3 Western Australia 10684769
MYQ MYFIZIQ LTD 0.25 -21 Western Australia 22039030
CV1 CV CHECK LTD 0.12 140 Western Australia 32757328
SM8 SMART MARINE SYSTEMS LTD 0.02 36 Western Australia 4963728
FZO FAMILY ZONE CYBER SAFETY LTD 0.14 -40 Western Australia 28087896
WBT WEEBIT NANO LTD 0.59 -16 Western Australia 37552704
CIO CONNECTED IO LTD 0.002 -33 Western Australia 3626170
DXN DATA EXCHANGE NETWORK LTD/TH 0.06 -53 Western Australia 20231216
NVU NANOVEU LTD 0.08 -9 Western Australia 9939765
SCL SCHROLE GROUP LTD 0.01 -47 Western Australia 6300962
NOR NORWOOD SYSTEMS LTD 0.004 -30 Western Australia 5460801.5
FBR FBR LTD 0.085 -15 Western 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).

Ticker Name Price (3.30pm 20 May) Return YTD (%) State of Domicile Market Cap
XPE XPED LTD 0.002 -20 South Australia 3013661.5
BUD BUDDY TECHNOLOGIES LTD 0.06 -38 South Australia 104594688
PRO PROPHECY INTERNATIONAL HOLDINGS 0.26 -13 South Australia 16322495