Transaction and SaaS sectors seems to be the investment sweet spot for 2014
Australia currently holds fourth spot when it comes to investments made into Asia Pacific region startups in 2014.
That record is currently held by Sutherland Shire headquartered Campaign Monitor, founded by David Greiner and Ben Richardson. The USD$250 million (AUD$266 million) of funds raised from US-based venture capital firms earlier this year is the largest capital injection experienced by an Australian technology startup ever. It is also the sole reason Australia will likely remain in the top 20 investments globally when December comes around, and we reflect on the year that was.
When it comes to acquisitions, the USD$523.5 million that Australia’s Seek.com used to buy the remaining shares in Malaysia’s Jobstreet.com, looks likely to remain in the number two position regionally on the opposite end of the equation.
Whilst there has been a hell of a lot of rhetoric about the lack of local capital available in Australia, it is wrong to then assume that nobody is wanting to invest in businesses in the Asia Pacific region. In fact, it’s the complete opposite.
In the past six months alone approximately USD$3.945 billion of capital has been injected into the region for either investment or acquisition purposes.
The question we need to ask ourselves as a space is: what are the types of businesses receiving these injections?
Regionally 50% of the top 20 ventures that have raised funds this year play in the SaaS and Transactions sector. Globally that figure jumps to 60%. Ventures such as Uber, Airbnb and Dropbox hold the top spots right now, the first two being transaction model businesses and the latter a SaaS business.
All of them have a global focus.
Interestingly out of the top 20 invested ventures in the local region the majority of focus is not global at all. It’s Asia.
Every single one of these startups also has an Australian replica, which has instead focused on breaking into the United States or United Kingdom market after launching in Australia. Many (not all but most) have failed to raise capital both here and State Side and have seen their trajectory plateau.
A slight shift in market-focus, however, could have seen them not only enter a market with over 4 billion potential customers, but would have seen them solve their capital woes instantly.
In May, Rosaline Koo, the CEO of one of Asia’s fastest growing startups ConneXionsAsia told Startup Daily that the opportunities for Australians in Asia were endless. This is especially true when it comes to transactional and SaaS startups playing in the B2B market in Asia.
ConneXionsAsia (CXA) is one such business that plays in that B2B sector and in only 16 months, has delivered SGD$6 million (AUD$5.17 million) in its first year alone – a 6% slice of Singapore’s $850 million (AUD$732 million) employee benefits brokerage market.
There is money waiting for Australian startups in the forms of sales, capital, and down the track, acquisitions right on our door step. Part of our country even shares the same time zone.
Will the big 2014 win Australia’s startup space has had with Campaign Monitor be a one-off thing?
Or are local startups going to wise up and begin to get clever with their go to market strategy putting Asia higher on their penetration list?