A new report by LaunchVic and global start-up and venture capital (VC) platform dealroom.co has found that Victoria’s start-up ecosystem value has jumped from $91 billion to $103billion in the past year.
According to the report, the valuation – based on Victoria’s 3200+ start-ups, scale-ups and 19 unicorns – the local start-up ecosystem has grown 18 times in value since 2016.
The report also highlighted that VC investment in Victorian start-ups has returned to 2018 levels, despite a global downturn in VC funding, with $668 million of VC investment being raised between January and November 2023.
In fact, while there have been no ‘mega-rounds’ of $100 million+ in 2023, VC funding rounds have ranged between $15 million and $100 million, remaining above pre-pandemic levels. Early-stage funding continues to remain stubbornly below $100 million investment per annum, with little movement since 2016.
Victorian healthtech and biotech start-ups are the most funded sub-sectors in 2023, followed by fintech. These sectors have also managed to capture a slightly larger amount of VC than the rest of Australia. There has also been an increase in the unique number of investors, which is 1.5 times higher than in 2019.
Overall over 1000 Victorian start-ups founded since 2003 have received VC investment, with around 25 per cent raising at least $5 million, though this is slightly lower than the global average of 30 per cent. The report also noted a cause for worry as only 15 per cent of these funded start-ups have had an exit via strategic sale, buyout or IPO – compared to over 30 per cent globally.
Victorian start-ups employ 56,000 people globally, of which 35,600 (63 per cent) are located in Australia, which is a marked 12.6 per cent increase in local start-up jobs from 2020. And 26,400 of the 35,600 Australian jobs are located in Victoria. Of the locally created jobs, 43 per cent are in one of three sectors: healthtech, fintech and real estate.
LaunchVic CEO, Dr Kate Cornick, said that 2023 had been a tough year for investment, but that Victoria’s start-up ecosystem continued to grow in terms of start-up numbers and start-up jobs.
“Early-stage investment continues to be a concern for LaunchVic, as it is essential start-ups get capital to support their early growth,” Dr Cornick said. “It is pleasing to see the work we have done to bring new investors into the start-up sector pay off; however, we remain laser-focused on increasing access to early-stage capital.”
