Melbourne, not Sydney, should be the clear choice for fast-growing overseas tech start-ups entering Australia, according to Switzerland-headquartered alternative lending start-up, Tradeplus24, which recently chose Melbourne as its home in Australia to begin a global expansion strategy.
According to its new Australian managing director, Adam Lane, Melbourne was an easy choice over Sydney due to the Victorian Government’s far greater commitment to tech initiatives, larger pool of available venture capital, its global recognition as the tech epicentre of Australia, and a superior ability to attract talent.
“After successfully launching and scaling our operations in Switzerland, we saw global expansion as a natural next step, and the choice of Australia had clear benefits for our business in particular,” said Mr. Lane.
“As an alternative lender to SMEs, we were looking for a market that had a thriving business sector which did not yet have access to the credit required to thrive and grow. Australia fit these criteria perfectly.
“However, it was not enough to find a country with high demand for our offering. We also needed to set up operations in a location within that country which provided access to resources, funding, support, partnerships, and where innovation and start-ups were taken seriously.
“Our research found that Melbourne was on top in almost every aspect, and so it wasn’t hard to make the decision to locate our first Australian operations in its heartland.”
Melbourne is Australia’s fastest-growing city projected to overtake Sydney to become the largest city by 2030.
It is home to more than half of Australia’s top tech companies according to InvestVic research, and it recently ranked 22 out of the top 30 global cities in the world for tech firms to operate in on the Savills UK “Tech Cities in Motion” report, while Sydney did not appear on the list.
Victoria as a whole is home to 8,000+ technology businesses generating $34 billion in annual revenue, employing around 90,000 people, and accounting for approximately one third of Australia’s ICT workforce.
Some of the state’s more notable homegrown start-ups include Afterpay, Airwallex, Culture Amp, Envato, and 99Designs. Overseas tech companies that have chosen to locate their Australian operations in Melbourne instead of Sydney include Zendesk, Slack, Square, and GoPro.
The short and easily-commutable distance between Melbourne and Sydney also allowed all of the above factors to override the slight size difference between Melbourne and Sydney’s fintech scenes - the tech vertical Tradeplus24 belongs to - as well as the fact that the financial services industry in New South Wales sits at around $64 billion compared to Victoria’s $40+ billion.
“It’s important for any tech company to have access to other companies within its own industry vertical, and in the industry it’s seeking to disrupt,” continued Mr. Lane. “Moreover, we are also seeking partnerships and clients from all over Australia, so this close connection between Australia’s two largest fintech hubs allowed us to make the decision we did.”
Acting Minister for Economic Development, Robin Scott, has welcomed Tradeplus24 to Melbourne, saying the investment is yet another accolade for Australia’s top tech city: “Melbourne is the leading destination for tech companies and this investment by Tradeplus24 is a strong vote confidence in our tech capabilities and talented workforce.”
Daniel Bisignano, Director at Invest Victoria, and Rebecca Schott-Guppy, General Manager at Fintech Australia, spoke at the launch event, held at the Victorian Government’s Investment Centre.