“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 |